“India’s $5 Trillion Goal”, What Former RBI Governor Rangarajan Says

Rangarajan was interacting with students on “The $5 Trillion Goal” as part of IIT-Madras tech festival Shaastra.
“People have been talking about India becoming $5 trillion economies by 2025. It is an aspirational goal. Today, our GDP is close to $2.7 trillion. Therefore, reaching $5 trillion is almost close to doubling our GDP,” he said.
“If you have to move from $2.7 trillion to $5 trillion economies, it will take seven years if the economy grows at 9% per annum and eight or nine years if it grows at 8% per annum,” he said.
“Reaching $5 trillion by 2025 is ruled out as we are not in that region at all. In fact, in the first quarter of the year, the GDP growth is 5% and in the second quarter, it was 4.5%. For 2019-20, the growth rate may not exceed 5%. For 2020-21, perhaps the economy may pick up and even then, growth may not exceed 6%. Therefore, we are not anywhere near 8% or 9% of growth which is required to reach the $5 trillion economies,” he said.
He said a sustained rate of growth of the economy between 8% and 9% was needed to achieve it and the per capita income also should be doubled from $1,800 to $3,600.
On economic slowdown, he said, “As of now, the economy is slowing down. The GDP, which is a measure of the overall performance of the economy, has slowed down considerably. The investment rate has fallen from 35.2% six years ago to around 27% now. There is a significant decline in the investment rate. If the economy needs to grow, the investment rate is one of the important factors. We need to address the issue.”

Categories: Economy, India news, News

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