Union finance minister said that by financial year 2020, India would be a $3 trillion economy. This would only aid in realising PM Modi’s dream of a $5 trillion economy by 2024. But what needs to be done to realise the dream?
Bengaluru: During her presentation of Union Budget 2019, finance minister Nirmala Sitharaman confidently said that by financial year 2020, India would be a $3 trillion economy.
This, in fact, was only a reiteration of Prime Minister Narendra Modi’s ambitious plan of skyrocketing the economy to $5 trillion mark by 2024.
Presently, the Indian economy stands at $2.8 trillion. And when Modi romped home to victory in the 2014 Lok Sabha polls, Indian economy stood at $1.9 trillion.
Though the government has set in motion robust debates and discussions on the feasibility or attainability of the target, what does it mean when the PM or the finance minister says, “an economy of $5 trillion”?
It simply means that by 2024-25, the overall economy (production/consumption and demand and supply) of India should be Rs 500 lakh crore.
Economy is a very important factor in the development of a nation. Swami Vivekananda once famously said, “Arise, awake and stop not till the goal is reached.” The Modi government has been following this principle, precisely, to reach the goal, which is acceptably tough, but pragmatically reachable.
How does one increase economy?
The first and foremost step in increasing the economy of any country is to increase the Gross Domestic Product (GDP). To boost the GDP, Modi government plans to further its policies to encourage GDP growth, namely Make in India.
To add to this, a great emphasis is being given to agricultural production and exports are also being increased.
In fact, PM Modi urged the chief ministers earlier this month to play a constructive role in realising the dream, by alleviating poverty, doubling farmers’ incomes and so on.
As said, presently, the Indian economy stands at $2.8 trillion. To achieve the $5 trillion, at the present juncture, it has to be doubled.
To achieve this feat, experts say that economy should grow at roughly at an average of 11.5%.
The number is on the higher side, but to achieve this, inflation has to be kept under check.
If inflation increases, which means to say that people have to shell out more to buy products, the purchasing capacity will be hindered. But fortunately, inflation is just above 3%.
India Today quoted Sujan Hajra, Executive Director, and Chief Economist, Anand Rathi Securities, saying: “"Inflation rate in India is just above 3% and even global inflation is not very high. The outlook for inflation also looks largely benign and even the global inflation rate has not shown signs of prices going up. This is going to aid India's GDP growth to achieve the $5 trillion target, which is not at all unrealistic unless the rupee depreciates."
Presently, we are at the halfway mark. A sustained growth, driven and propelled by policies aiding in production should see us realise this important target by 2024.
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Last Updated 5, Jul 2019, 5:11 PM