Vantage | India isn't a $4 tn economy yet, but it's growth story is for real

On 19 November, an unverified screenshot went viral. It was trending on X, formerly known as Twitter. It was a grab of the live tracking feed of GDP for all countries and allegedly belonged to the International Monetary Fund (IMF). It showed India’s economy surpassing the $4 trillion mark.

The tweet went viral in just hours. Political and business personalities retweeted it. Economists and analysts welcomed it. It was all over social media. They were all lauding India for achieving this feat.

But officially, there was pin-drop silence, no tweet from the government. No confirmation from the finance ministry. Even the National Statistical Office did not comment on it. But that viral screengrab was probably fake. India has not crossed the mark, though it remains quite close to it.

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World’s biggest economies are:

1. United States: $26.9 trillion
2. China: $17.7 trillion
3. Germany: $4.4 trillion
4. Japan: $4.2 trillion
5. India: $3.75 trillion

Currently, India is the world’s fifth largest economy, after the United States, China, Germany and Japan.

In June the GDP touched the $3.75 trillion mark according to the Indian finance ministry data. This is up from the $2 trillion mark in 2014. So the economy has been growing steadily for quite some time. Even during the pandemic and the global economic gloom that followed it, India remained resilient.

A “bright spot” in the global economy.

So if it is not $4 trillion yet, how far is India from its goal? Well, not so far. According to IMF data, India’s GDP will reach $4.2 trillion in the next fiscal year.

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At this rate of growth, it will still take India 3 years to surpass Japan to become the fourth largest economy.

Which brings us to the question, when will India become a $5 trillion economy? Nominal growth will have to average 9.1 per cent for India to reach this goal by 2027. If that happens, India will surpass Germany as well. Having said that, there are a list of challenges ahead. And former RBI Governor D Subbarao spoke about it. He listed eight main challenges:

*   Increasing investment
  
*   Improving productivity
  
*   Improving health and education
  
*   Creating jobs
  
*   Raising agriculture productivity
  
*   Maintaining macroeconomic stability
  
*   Managing global mega-trends
  
*   Improving governance

So that’s what stands between India and a $5 trillion economy right now. Right now our economy is in a good place. It is growing consistently. It is one of the world’s major economies, and has displayed a lot of resilience. So while this viral screenshot turned out to be fake, India’s growth story is for real.

Views expressed in the above piece are personal and solely that of the author. They do not necessarily reflect Firstpost’s views.

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