India to be $5 trillion economy in Amrit Kaal: MoS Finance

India is poised to achieve the status of a $5 trillion economy in the 'Amrit Kaal,' on the path to achieve its goal of attaining advanced economy status by 2047, as per Pankaj Chaudhary, the minister of State for Finance.

The International Monetary Fund (IMF) has projected that India will reach a $5 trillion economy, boasting the third-largest GDP, by 2027-28.

In a written response in the Lok Sabha, Chaudhary says that the strong rupee, stemming from macroeconomic stability, will play a crucial role in surpassing the $5 trillion milestone. 

"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," Chaudhary says.

As of the conclusion of the 2022-23 fiscal year, India's GDP stood at $3.7 trillion. Chaudhary highlighted the historical trajectory of India's economic growth, citing the evolution from a $189 billion economy in 1980-81 to $326 billion after a decade. In 2000-01, the size of the GDP rose to $476 billion.

Acknowledging the significance of the exchange rate in determining India's GDP size globally, Chaudhary stressed that India operates as a market economy, with the government closely monitoring economic progress through market-determined GDP and exchange rates.

He further highlighted that GDP and exchange rates are given much importance and are hard to be overlooked. "India is a market economy, and the government monitors economic progress through market-determined GDP and exchange rate," Chaudhary adds.

He explained the significance of both domestic and international markets, which determine India’s GDP, exchange rate and several factors responsible for GDP. The breakdown of nominal GDP contributions from agriculture, industry, and services for the fiscal year 2022-23 was 18.4%, 28.3%, and 53.3%, respectively.

Chaudhary outlined the government's active role in economic progress through policy interventions, including measures announced in annual budgets. The key initiatives over the past nine years include the implementation of the Insolvency and Bankruptcy Code (IBC), recapitalisation of public sector banks, the rollout of Goods and Services Tax (GST), reduction in corporate tax, increased capital expenditure, introduction of the Production Linked Incentive (PLI) scheme, continuous liberalisation of the FDI regime, and investments in digital infrastructure.