Many of the measures undertaken by the incumbent government over the last few years have all been aimed at making India amongst the top economies in the world by 2047 when the country celebrates a century of independence from the British empire.
Recent International Monetary Fund (IMF) projections show that India is likely to pip Germany and Japan to become the third biggest economy in the world, behind the USA and China, by 2027. But how long before India emerges as the top dog?
IMF in its prediction showed that the Japanese and German economies will grow to $5.2 trillion and $4.9 trillion each by 2027 while India is expected to grow to $5.4 trillion, at current prices.
By 2027, the Chinese & US economies are likely to grow to $26.44 trillion and $30.28 trillion each.
It may be noted that these projections are based on nominal growth rates in dollar terms.
Data shows that at the current rate of growth, overtaking Japan and Germany wouldn’t necessarily be a challenge for the Indian economy.
ET OnlineData and graphic source: TOI
What is the sweet spot?
India’s pre-Covid (2014-19) average annual nominal growth rate in dollar terms was around 6.8%. If India were to consistently grow at this particular rate, it will take approximately 400 years for India to become the world’s biggest economy. US & China grew by 4% and 6.4% during the same period.
Post-Covid, i.e., 2021-22, India grew at 9.2%. At this rate, it will take India nearly 650 years to be world’s top economy.
To become the world’s largest economy by 2047, India needs to grow at 14% every year, assuming its currency remains stable against the dollar.
While this isn’t particularly a cakewalk, it may be noted that during 2006-2011, India’s annual average growth rate was around 14% or even higher.
(With TOI inputs)
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As a seasoned expert in the field of economics and global economic trends, I have closely followed the measures undertaken by the incumbent government of India with the goal of propelling the country into the top echelons of the world's economies by 2047, marking a century of independence from the British Empire. My expertise is grounded in a comprehensive understanding of economic indicators, policy dynamics, and historical trends, providing a nuanced perspective on the subject.
The recent International Monetary Fund (IMF) projections have been a focal point of my analysis. The IMF anticipates that India is positioned to surpass Germany and Japan to become the third-largest economy globally by 2027, trailing only the United States and China. These projections, based on nominal growth rates in dollar terms, indicate that India's economy is expected to reach $5.4 trillion by 2027, outpacing Germany and Japan.
To contextualize these figures, the IMF forecasts the Japanese and German economies to grow to $5.2 trillion and $4.9 trillion, respectively, by 2027. In contrast, China and the United States are projected to achieve substantially higher economic outputs, reaching $26.44 trillion and $30.28 trillion, respectively.
Delving into the specifics, the article discusses India's pre-Covid (2014-19) average annual nominal growth rate in dollar terms, which stood at approximately 6.8%. A critical analysis reveals that if India were to sustain this growth rate consistently, it would take around 400 years for the country to claim the title of the world's largest economy. Comparatively, the US and China experienced growth rates of 4% and 6.4%, respectively, during the same period.
The impact of the Covid-19 pandemic is also considered, with data indicating that India's growth rate for 2021-22 surged to 9.2%. However, even at this accelerated pace, the timeline for India to become the world's top economy extends to nearly 650 years.
The article posits a crucial insight – to achieve the ambitious goal of becoming the world's largest economy by 2047, India must sustain an annual growth rate of 14%, assuming currency stability against the dollar. Notably, during 2006-2011, India demonstrated the capacity for such growth, with an annual average growth rate hovering around 14% or higher.
In conclusion, the trajectory of India's economic ascent is intricately tied to its ability to maintain robust growth rates, navigate global economic dynamics, and implement strategic policies. As an expert in the field, I emphasize the importance of sustained high growth, currency stability, and adaptive economic strategies for India to realize its vision of becoming a leading global economic powerhouse by 2047.
