2024-08-13 23:35:45
Hyderabad: International Monetary Fund (IMF) Executive Director Krishnamurthy V Subramanian on Monday made a big prediction on the Indian economy. He said that if the central and state governments implement the necessary policies to take India’s economic growth to eight percent, then the country can become a $ 55 trillion economy by the year 2047. Subramanian said this at a program organized at the ‘Indian School of Business’ (ISB) here on the unveiling of his book ‘India at 100’. Krishnamurthy said that the target of becoming a $ 55 trillion economy may seem audacious. But, it can be achieved. He also said that India’s private debt and gross domestic product (GDP) ratio was 58 percent in the year 2020, which is about six decades behind the advanced economies and these countries are now at 200 percent.
How will this target be achieved?
The senior IMF official said that unprecedented work is being done in the field of financial inclusion through schemes like ‘Pradhan Mantri Jan Dhan Yojana’. He said, ‘This target certainly seems audacious. But the power of compounding makes it possible. If we are able to register growth at the rate of eight percent, we can actually become an economy of 55 trillion dollars.’
When asked the reason for this belief, Subramanian, who was the Chief Economic Advisor to the Government of India, said, “My belief is based on the ‘Rule of 72’. According to this, at a growth rate of 12 per cent in dollar terms (after adding eight per cent GDP growth and five per cent inflation, depreciation of one per cent in rupee against dollar), GDP doubles every six years.”
Subramanian gave the example of Japan
Subramanian said that the $3.25 trillion economy will “double four times” in the next 24 years from 2023, due to which it will reach $52 trillion by 2047. He gave the example of Japan, where its economy was $215 trillion in 1970. But, in 1995, it became $5.1 trillion.
He said that apart from physical infrastructure, India also needs to invest in human capital, enhancing healthcare and creating digital capital.