iNDICA News Bureau-
India may become a $5 trillion economy only by the financial year 2028-29, data released by the International Monetary Fund (IMF) have revealed.
In 2019, India’s Prime Minister Narendra Modi had promised to turn the country into a $5 trillion economy by 2024-25, making it the world’s third-largest economy after the United States and China.
Even as he made that claim the pace of economic growth in the country was already slowing down. Then the Covid-19 pandemic struck and India’s economic crisis worsened.
With the economy slowly returning to the growth path again in financial year 2021-22, the finance ministry’s new chief economic adviser, V Anantha Nageswaran, said in Feb after the budget was presented that he hoped India would achieve the goal of becoming a $5 trillion economy by 2025-26 or, latest, by 2026-27, riding on sustained 8–9 percent growth every year.
However, the IMF data reveal that the Indian economy will reach the value of $4.92 trillion in 2027-28, which means it can only achieve the target the following year at the earliest, the financial newspaper Business Standard reported.
According to the IMF, India’s nominal GDP is expected to grow 13.4 percent in the current financial year in rupee terms. In U.S. dollar terms, the IMF expects India to grow by 8.2 percent this year.
The fund had earlier estimated this year’s growth at 9 percent. The Reserve Bank of India, the country’s central bank, itself expects the GDP growth this year to fall to 7.2 percent.
The difference in the nominal growth rates in rupee and dollar terms in the IMF prediction can be explained by the expected change in the rupee exchange rate, the financial website MoneyControl said. This year, the rupee is expected to depreciate to 81.5 to the dollar as against 77.7 in 2021-22.
The IMF also sees the rupee falling to as much as 94.4 to the dollar by 2027-28, which is the last year for which the fund has made its current projections.
