India’s Finance Ministry has projected that the country could become the world’s third-largest economy by 2027, with a gross domestic product (GDP) of $5 trillion. This announcement comes ahead of the interim budget release scheduled for later this week.
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According to the ministry’s report released on Monday, India’s economy is expected to grow at or above 7% in the fiscal year 2024. If this target is met, it would mark the third consecutive year of 7% GDP growth for India. Currently, India’s GDP stands at $3.7 trillion.
V Anantha Nageswaran, India’s chief economic advisor, attributed the robustness in domestic demand to reforms and measures implemented by the government over the past decade. He highlighted that investment in physical and digital infrastructure has been instrumental in boosting the supply side and manufacturing sectors.
Ministry of Finance expects 7% GDP expansion for FY 2023-24, showcasing India’s economic strength. Modi’s leadership drives positive results. #BudgetSession #PMModi pic.twitter.com/KXKBT6MgLH
— Balkishan Bajpayee (@Callme_Balkish) January 31, 2024
Nageswaran also expressed optimism about India’s future, stating that “real GDP growth will likely be closer to 7 percent” in fiscal year 2025.
The report clarified that the document released on Monday was not the Economic Survey of India, which is prepared by the Department of Economic Affairs ahead of the Union Budget. The Union Budget, set to be released after the general election between April and May, will follow the interim budget presented by Finance Minister Nirmala Sitharaman on Thursday. The interim budget is not expected to include major changes to spending or tax policies.
Goldman Sachs projects that India could become the world’s second-largest economy by 2075, surpassing not only Japan and Germany but also the United States. Currently, India ranks as the world’s fifth-largest economy, trailing behind the U.S., China, Japan, and Germany.
In terms of market performance, India’s stocks have shown a positive trend, with the Nifty 50 index rising by over 20% in 2023 and breaching the 22,000 mark this month. Investors are optimistic about India’s growth prospects, anticipating further policy continuity and potential interest rate cuts by the Reserve Bank of India later this year.
Photo Credit: Shutterstock / Ronnie Chua
