India is currently the 5th largest economy in the world after the US, China, Japan, and Germany by 2027-28. India is projected to surpass Germany and Japan to become the third-largest economy.
This is a departure from Prime Minister Narendra Modi’s earlier target of hitting the $5 trillion mark by 2024 25. It will be 2027-28 when India touches its goal post of $5 trillion GDP.
To make India a $5 trillion economy by 2027, the country needs to implement several reforms and strategies. Some of the key measures include:
Promoting digital economy and fintech: India has been focusing on the growth of its digital economy and fintech sector, which is expected to contribute significantly to the country's GDP.
Technology-enabled development: The government aims to promote technology-driven development, including areas such as artificial intelligence, robotics, and the Internet of Things.
Energy transition and climate action: India is working on a roadmap that includes energy transition and climate action, which are essential for sustainable growth and development.
Insolvency and Bankruptcy Code (IBC): The IBC has been implemented to improve the ease of doing business and attract more foreign investment.
Reduction in corporate tax rate: A significant reduction in the corporate tax rate has been introduced to make India more attractive for businesses and investments.
Make in India and Start-up India strategies: These initiatives aim to boost domestic manufacturing and encourage the growth of start-ups in India.
Production Linked Incentive Schemes: These schemes have been introduced to support the growth of various industries and attract investments.
Capex-led growth strategy: The government has focused on increasing its capital investment outlay substantially to support infrastructure development and other growth-promoting projects.
Investment in education and infrastructure: Addressing the existing challenges and investing in education, healthcare, and infrastructure is crucial for inclusive growth and attracting more foreign investment.
By implementing these reforms and strategies, India has the potential to achieve its ambitious target of becoming a $5 trillion economy by 2027 and solidify its position as a major economic power
What are the major challenges that India might face in achieving a $5 trillion economy?
Environmental concerns: India is facing severe environmental challenges, including air pollution, water scarcity, and climate change, which can impact the country's economic growth.
Geopolitical tensions and rising interest rates: These factors could potentially impact India's growth trajectory and pose challenges to achieving the $5 trillion economy goal.
Regulatory environment: Complex regulations, bureaucratic red tape, and inconsistent policies can pose challenges for businesses and hinder the ease of doing business.
Fiscal deficit and public debt: India is dealing with a high fiscal deficit and mounting public debt, which can strain the government's ability to invest in infrastructure, education, healthcare, and other areas necessary for sustained economic growth.
Skill development: Equipping the workforce with the necessary skills to meet the demands of the changing economy is crucial for achieving the $5 trillion economy goal.
Addressing these challenges will be crucial for India to realize its goal of becoming a $5 trillion economy. By leveraging its strengths, addressing weaknesses, and capitalizing on opportunities, India can pave the way for a resilient and prosperous economy that benefits all sections of society.
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