Finance Minister Nirmala Sitharaman has stated that Prime Minister Narendra Modi’s vision to make India a $5 trillion economy and a global economic powerhouse by 2024-25 is “challenging” but “realisable”. She highlighted that more reforms are on the anvil before the close of the fiscal year.
On Tuesday, while giving a speech at the Columbia University’s School of International and Public Affairs on ‘Indian Economy: Challenges and Prospects’, Ms. Sithraman said that the Indian economy has been on a developing path since the Modi-government came to power in 2014.
The Finance Minister stated that “In 2014, when the National Democratic Alliance (NDA) was voted to power by the world’s largest democracy, India was a $1.7 trillion economy. In 2019, India has become a $2.7 trillion economy, having added one trillion US dollars in the last five years. Our vision to become a 5 trillion dollar economy by 2024-25 is challenging, but it is realisable.”
The lecture was arranged by the University’s Deepak and Neera Raj Center of Indian Economic Policies. She also stressed that a $5 trillion economic powerhouse moving it from the 7th to 3rd position in terms of the current dollar exchange rate.
The government emphasized its priorities in the first 50 days of its second term. The minister went on saying, “To become a $5 trillion economy, India’s GDP needs to go faster than what we grew at an average of 7.5 percent in the last five years. That’s a matter of fact statement. Inflation needs to be at 4 percent to ensure commensurate increase in purchasing power.”
“We are well and truly on our way to becoming a $5 trillion economy by 2024-25. A five trillion dollar economy will make India a global economic powerhouse moving us from the 7th to 3rd position in terms of current dollar exchange rate.”
“However our ambition to become economically strong has been driven more by our desire to become a less poorer nation,” she said.
Ms. Sitharaman recalled that in July 2019, when she presented the first budget of the second term of the PM Modi government. “Yet we projected the GDP to grow at 7 percent in 2019-20, slightly higher than the 6.8 percent realized in 2018-19. Even when our GDP decelerated in the fifth successive quarter, we did not revise downwards our projections as some institutions around the world have already done,” she said.
“The reforms were and will be guided by close scrutiny of growth evidence in the economy. Our mission to become a $5 trillion dollar economy in 2024-25 remains unchanged and further strengthened by our resolve to deliver on the resounding mandate given to us by the largest electorate in the world,” she said.
“A critical component of our mission is high levels of investment, driven by the private sector, a larger presence in the global markets, and a lower level of public debt,” she stated.
She cited figures by the International Monetary Fund and said it has projected growth for India at 6.1 percent for the year 2019-20 with the world growth downwards at 3.2 percent. “We continue to remain one of the fastest-growing economies in the world,” she said.
The World Bank has estimated the level at 7 percent in 2019-20 and will further decline to 4.6 percent of the population by the year 2022. “This means that in a decade, we have lifted 168 million people out of actual poverty which I think is a fitting tribute to Mahatma Gandhi, who dreamed of ridding the country of this scourge,” she said.