View: A $5 trillion economy is a stretch; do we have the running legs?


In 2018, India’s per-capita gross domestic product (GDP) was $2015.60, according to the World Bank. This makes sense – our economy is currently sized at $2.7 trillion, and our population is around 1.35 billion.

This is considerably behind the United States ($62,641) and not even a fourth of ’s $9,770.80.

The Bank’s data show that India’s GDP per capita grew by 5.9% in 2018 over 2017. That was the slowest since 5.14% in 2013. Growth in per-capita GDP during Modi 1.0 tells the story: 6.19% in 2014, 6.8% in 2015, 6.99% in 2016, then 6.04% in 2017 (post-demonetization).

Like all good CEOs, Prime Minister Narendra Modi sets stretch targets. We have been challenged to hit $3 trillion in GDP in fiscal 2019-20, and the New India goal is to be a $5 trillion economy by 2024-25. About time, too: India is projected to be the world’s most populous country by 2025, with at least 1.45 billion people. Our per-capita GDP, if we hit the $5 trillion mark, will be around $3,600.

Finance Minister Nirm Sitharn said in her budget last Friday: “In Purchasing Power Parity terms, we are in fact, the 3rd largest economy already, only next to and the USA.” That is true in PPP terms (although, at $9.33 trillion, we are considerably behind at $22.54 trillion and the US at $18.22 trillion).




和所有优秀的首席执行官一样,印度总理纳伦德拉莫迪也设定了一些难以实现的目标。我们面临的挑战是国内生产总值在2019- 2020财年达到3万亿美元,而印度的新目标是在2024-25财年达到5万亿美元的经济规模。也是,印度预计到2025年将成为世界上人口最多的国家,至少有14.5亿人口。我们的人均国内生产总值,如果达到5万亿美元,将在3600美元左右。



India’s PPP per-capita GDP (measured in 2011 dollars) rose to $6,899 in 2018 from $1,886 in 1991, when economic reforms began. Many economists believe PPP is a better gauge of an economy’s strength.

You could argue that a $5 trillion economy is the minimum we should aspire to, given our size and population. Right now, India is just about at the level of lower middle income countries in PPP terms (average $6,777). Ahead of India are a large number of countries, notably ($16,187), the United States ($55,681), Canada ($44,051), France ($39,556), Germany ($45,959), and Japan ($39,294). Even Sri Lanka ($11,955) looks better-off than us.

Undaunted, like Miss Adela Quested in A Passage to India, we will continue on our fateful climb to the upper Marabar Caves, leaving behind the mirage stirred up by “professional pessimists”, as the prime minister put it.

The Economic Survey drew a pragmatic blueprint for the next five years. “To achieve the objective of becoming a US$5 trillion economy by 2024-25, India needs to sustain a real GDP growth rate of 8%,” it says. “International experience, especially from high-growth East Asian economies, suggests that such growth can only be sustained by a ‘virtuous cycle’ of savings, investment and exports catalysed and supported by a favourable demographic phase.”

How are we doing on those metrics? Household savings rates have declined steadily over the recent past – to 17.2% in 2017-18 from 23.6% in 2011-12. Our overall savings rate was at a weak 30.5% in 2017-18 from a high of 37.8% in 2008. Private investment is still moribund. Our trade deficit is rising on the back of weak export growth.






The 2019-20 budget, short on numbers, is not likely to set off a frenzy of investment. Even the ambitious fiscal deficit target of 3.3% of GDP was revealed by Sitharn after her .

How will the go nment finance its expenditure, including a Rs 70,000 crore capital infusion into still-struggling public-sector banks and a six-month credit guarantee for crisis-hit NBFCs, as well as its agriculture and social-welfare plans? Gross tax revenue would have to grow in 2019-20 at more than twice the pallid rate of 8.4% in 2018-19. The GTR was hit by lower receipts from both GST and direct taxes. Gross go nment borrowings are projected at a whop Rs 7.1 trillion, surging from 5.7 trillion last year. “Simultaneously delivering on fiscal consolidation and raising incomes will be extremely challenging for India's authorities, particularly since growth is likely to remain weak over the coming year,” Moody's Investor Service said.

One senior economist told me the unrealistic number are untenable. “The tax authorities are being given unrealistic targets that will lead to tax te rorm,” he said. “The spending ministries are being given allocations that they cannot spend.”

2019年至2020年的预算数字不足,不太可能引发投资热潮。即使是财政赤字占GDP 3.3%的雄心勃勃的目标,也是在西塔拉曼发表演讲后公布的。



A pliant Reserve Bank of India has been more than happy to help. It has cut interest rates three times this year, and it purchased 60% of last year’s go nment bond issues in the open market. Now, the go nment is waiting expectantly for the Bimal Jn committee report next week, which might be the Open Sesame it needs to access the central bank’s huge reserves.

Still, the go nment’s plans to borrow as much as $10 billion through sovereign bonds overseas, combined with optimism that both the RBI and the U.S. Federal Reserve might trim interest rates, has received a thumb’s-up from bond markets. The yield on the benchmark 10-year go nment bond has fallen to around 6.54% (it hit 8% last year), narrowing the real interest rate, that is, the gap with inflation, which is around 3%.

But things are going to get worse before they get better. This year’s monsoon will be deficient. Even if banks start to lend again, private investment revives, and a NBFC shakeout takes place, we are looking at two more years of pain. Will we achieve 7% GDP growth this year, and vault to 8%-plus in the remainder of Modi 2.0? That would be the stuff of legend. Right now it is legerdemain.





译文来源:三泰虎 http://www.santaihu.com/48094.html 译者:Joyceliu


Kumarapuram Sadasivan

The trick for becoming a economic powerhouse is kee wealth inside the Nation.Unfortunately the money goes to the US Treasuries.Now about US Dollars 12 to 152 Billion.The Forex is also higher by about US Dollars 126 Billion.312 MT Gold is with the BoE and BIS who suppress the price of the same by Swaps,to keep the US Dollar strong and hence the Rupee weaker.India''s money outside and huge Forex also weaken the Rupee.A strong economy has to have a strong Currency.More so for an essentially importing nation like India..



Dilip Shah

The paper is based on realities. it is also a disappointing to ne that there no strategic plan to raise the savings, investment and export earnings. it is ne a pessimist view that with hardly around 2.5% agricultural growth how shall we achieve 4% growth a minimum need of achieve 8% growth. it also sad to ne how much we behind populated and even Shrilanka. our Economy will need to be far strong t0 realise the dream.DILIP SHAH



Dillip Patnaik

Modi''s 5 trillion economy is hug wash. When nepotism, lethargy and inefficiency is the main core of India how do expect wng horse race.




India should emulate , South Korea, Japan which countries gave open reigns to the private sector. The grounds for the private sector to release its pential is to revamp the laws strangulating the economy brought in by the Congress go nment. Unfortunately Mr Modi does not have the majority in the Rajya Sabha and every progressive law is blocked by the Congress and its left allies and hence not passed to become law.




Yes, if country as ONE has guts and has ability to harder and together with positive mind. Negative people corrode pipeline/path and create leaks. Can you be a strong brick in this marathon structure called country?



M.L. Gupta

India has the pential. Cor ion and destructive po itical policies of all players have adversely affected the march to prosperity. About 98% population is victim of adulteration in food, healthcare, education, policing, justice dispensation, governance and ethics. If it is changed, which is possible if the countrymen decide to act honest for the next five years, 5 tr is a small dream. Agents of change know what is possible and what not. Let us try to do something to realize these small goals as citizens and employees in private as well as public sector and all categories of businesses. Our individual efforts will bring about a magical change. Can the citizens take a solemn vow not to indulge in co ption or adulteration?



V K Gupta

Let your dream becomes a reality. With regards.




Our country can reach even 10trillion economy if - (1)- our population is controlled (2child policy) (2)- tax filing mandatory , with uniform tax rates for all (3) sever punishment for co ption (starting from the top like ias ,ips , mla. Which do co ption in 100s crores ) , not from the bottom .(4)- and providing social security like usa , amount calculated depending on the amount of tax filed







with the estimated economy, can our roads be better, our Schools/ teachers ratio will be better, our employment will be better and our Medical services will be better ?



Merry Airman

Basically , India under Modi is trying to catch up with Sri Lanka in GDP per capita in PPP terms. What a joke this gt. is !!!



Charanjit Singh

Hopefully, the weaker dollar will also contribute a part to the trillion dollars....



Logical Indian

Any country can develop only & only when it has a highly performing population. In India people do not perform their duties. This kind of mentality doesnt est in developed countries. We hv labour unions and various other unions which do not think positively to develop the peoples well being. Their leader''s selfish po itical interests has ruined the nation. No other highly develo country has unions stop contrymen from performing. Again we are a consuming country instead of a producing country.Unless people start performing we cannot reach the goal.produce quality goods at cher rates



Vitthal P

After highest unemployment of 45 years during the last tenure of Modi, should one believe his words? He is the biggest liar wasting public money with no idea about the economy. They have taken away Railway budget. Main budget after hearing the current FM, has become a frivolous exercise. No plan to control the population growth. Idiotic vers have ved for master liar again. He only diverts attention from real issues and escapes.




Borrowing beyond ones means has always led to downfall of individuals, industries & whole nations. Hope we dont go down that route.



Parambir Hanjra

Modi is going to blame Pakistan for the dilemma as usual whereas the last 5 years Modi was in power of everything including media



ashok surana

Things are going to get much worse before they change for better. The whole sy em is to blame and an unexpected source is going to be the reason.



Parambir Hanjra

Things are already out of hand India is on a steep slope to destruction and Modi is not responsible as uneducated it is the dumbest ver who is or is it the EVM



Kl Jain

What a foolish debate ? Mr. Modi is master of engaging peoples in useless debates. The size of Indian economy at the time of Independence was just 30 billion USD which has risen by more than 80 times in last 70 years. What a big deal if the same is again double in next 5 - 6 or 8 years. This has to happen despite any Go nment.

这是多么愚蠢的辩论啊?莫迪擅长让人们参与无聊的辩论之中。印度独立时的经济规模只有300亿美元,在过去70年里增长了80多倍。如果同样的数字在未来5 - 6或8年内再翻一番,那将多么可观。不管哪个政府上台,这都会实现的。


Valerian Pereira

Set your Targets first. Your Visionand work hard to achieve it. In fact, every Indian needs to be part of it in making things happen. to make better.nothing is impossible. Every sector and walk of life we need to work..




I just don’t understand one thing , our auto sector is in the worst crisis , aviation sector is in crisis , nbfc are down , real estate is down , how come the stock market ( nifty) still going up , and lol how is growth 6.8 




Sir if goverment makes tax rate 10 percent for every one , then only we can move forward , i have seen people like kachori w , sweet shops etc have daily sales of more than 50000 rs and tgey do not even file taxes , and i think atleast tax filing should be made mandatory for every citizen , while providing full rebate to the poor while decreasing the tax rates , and sops like social security , medical security should be provided like other countries



Sanjay Chowdhury

The go nment should talk about per capita income of 90% (i. e. excluding 10% upper start) instead of GDP. This GDP figure is of no use for the common man.



Jai Hind

all round development is important than a this number game. let''s look at how we work on water conservation, sanitary, health and education... once we achieve betterment in these parameters, size of the economy is biproduct.



Logical Indian

Dont u think nothing will improve ever unless exploding indian population is immediately controlled?



Rguru Prasad Jakk

There is no point in drumming up for $5 trillion economy, when your people are still living on platforms, babies are dying, people are struggling for medical care, farmers are committing suicides. If you come up with means and ways to fix these things we will automatically be there.



Pradeep Rao

If rupee value appreciates to $50 levels.. we will reach it in few months




If we don''t stretch,we may take 10 years to reach that milestone.Is that what you want.Or we may not reach there at all.People like you will say why stretch and exert.Lets stick to the Hindu rate of growth of 3% which we have been averaging for the best part of our Indipendance.No body has achieved any thing without stretching my friend.


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