India to become $5tn economy in 'Amrit Kaal': MoS Finance
Pankaj Chaudhary, the Minister of State for Finance, stated that India is poised to become a $5 trillion economy in the early stages of "Amrit Kaal." "The government has set the goal of becoming an advanced economy by 2047. In the process, it will become a $5 trillion economy early in the Amrit Kaal," said Chaudhary. Chaudhary attributes a strong rupee and macroeconomic stability as key factors in reaching the $5 trillion mark.
What is Amrit Kaal?
In 2021, PM Narendra Modi introduced the term Amrit Kaal for the first time during India's 75th Independence Day. Calling this period a "culmination of hard work, sacrifice and austerity", he said that this is a period of 25 years to get back what our society has lost in hundreds of years of slavery. According to Vedic astrology, Amrit Kaal represents an auspicious time for new beginnings, offering opportunities for everyone.
Indian GDP growth and exchange rate factors
The International Monetary Fund (IMF) predicts India will reach the $5 trillion milestone with the third-largest GDP in 2027-28. Chaudhary stressed the importance of the exchange rate in determining India's global GDP size, stating, "India is a market economy, and the government monitors economic progress through market-determined GDP and exchange rate." Both domestic and international markets influence India's GDP, exchange rate, and sector-wise contributions to the GDP.
The quick progress India made over these years
In 1980-81, India's economy measured $189 billion, climbing to $326 billion within a decade. By 2000-01, it had expanded to $476 billion. A significant surge occurred in 2010-11, propelling India's GDP to $1.71 trillion, surging further to $2.67 trillion by 2020-21. And at the end of 2022-23, India's GDP reached $3.7 trillion. Chaudhary also noted that policy interventions introduced by the government also contribute to economic progress, including those announced in annual budgets.
Government initiatives to boost GDP growth
Over the past nine years, the Indian government has implemented various initiatives to boost GDP directly. These include the Insolvency and Bankruptcy (IBC) Code, recapitalization of public sector banks, and Goods and Services Tax (GST) rollout. Then corporate taxes were reduced, effective capital expenditure was increased, and the Production Linked Incentive (PLI) scheme was introduced in 14 sectors. Continuous liberalization of the FDI regime and digital infrastructure development are also some schemes that contributed to GDP growth.
