India Is On Track To Become Third Largest Economy: Economists

New Delhi, Aug 16 (KNN) India may well be on track to becoming the third largest economy in the world in the coming years, as per economists stating that the country has the potential to grow by a robust 6.5-7% per annum.

The experts are of the opinion that a number of factors including the performance of other countries, skilling of our workforce as well as a sustained revival in domestic consumption demand would play a key role in achieving this.

“India is very much on target to becoming the third largest economy based on the IMF’s projections as well as domestic estimates. Our real rate of investment is about 33%, the current account deficit is lowering and our demographic dividend is coming into play,” said DK Srivastava, Chief Policy Adviser, EY, while noting that India has also managed to meet the challenges thrown up by the Russian-Ukraine war that has led to supply side bottlenecks for many countries.

He, however, stressed that creating productive jobs for the labour force while adopting new technologies such as AI to enhance the productivity must be taken up. “A large part of the government budget would have to be spent on training and reskilling the labour force,” he said.

Apart from GDP, India is also doing better on other parameters such as overall indebtedness of the economy, which is much lower at about 170% of the GDP. Japan has the largest debt to GDP ratio at over 400%, Srivastava said, while China’s is at close to 300% and Germany’s is about 190%.

According to IMF projections, India overtook the UK to become the fifth largest economy last September, and was behind only the US, China, Japan and Germany. 

The Indian economy grew at 7.2% in 2022-23 and is expected to grow at a slower 6–6.5% this fiscal. Many agencies are likely to review their GDP growth forecast for the fiscal after the first quarter GDP data is released on August 31.   (KNN Bureau)