India is considered one of the potential superpowers of the world. This possibility has been attributed to many indicators, mainly demographic trends and a rapidly growing economy and military. India became the fastest-growing economy in the world in 2015, with estimated GDP growth of approximately 5%.
There is no stopping India which is celebrating eight years of the BJP government in office and is on an upward thrust. Prime Minister Modi’s decisive leadership to deliver on the economic and development front has worked.
India has emerged as the fastest-growing economy globally, displacing China with an 8.7 per cent GDP uptick in the fiscal year ending April 2022. Incidentally, this is the highest growth posted by India in 22 years after 8.8 per cent was reported in 2000.
It was reported that currently, India is the third largest economy in the world in PPP terms, with a share of 7% of global GDP after China and the U.S.
In the event India achieves its targeted growth rate of 11% into the next decade, it would invariably become the second largest economy in the world not by 2048 as projected earlier, but by 2031, according to a statement made by Michael Debabrata Patra, Deputy Governor of the Reserve Bank of India (RBI) recently.
Speaking at a recent event to celebrate Azadi Ka Amrit Mahotsav, Dr Patra said, “Even if it does not sustain this pace and slows to 4-5% in 2040-50, India will become the largest economy of the world by 2060 (surpassing China)”.
He noted that India was the world’s sixth-largest economy in terms of market exchange rates, by observing India’s progress in a cross-country setting. He also added that it is noteworthy that Japan’s era commenced in the 1960s and lasted through the 1970s and 1980s while China began in the early 1990s, taking it to the position of the second-largest economy in the world. However, India’s time started only around 2015.
He emphasised that despite the pandemic and the war between Russia and Ukraine, India was going to contribute about 14% of global growth. India would be the second most important driver of global growth in 2022 after China.
Stating that the use of market exchange rates for cross-comparisons of economic performance measured by GDP had been questioned, he said an alternative measure was purchasing power parity. “It is the price of an average basket of goods and services that a household needs for livelihood in each country,” he said.
Dr Patra further noted, “Currently, India is the third largest economy in the world in terms of purchasing power parity (PPP), with a share of 7% of global GDP [after China (18% ) and the U.S. (16% )],”.
He also said that India’s GDP in market exchange rates is expected to reach US$ 5 trillion by 2027. “By that year, India’s GDP in purchasing power parity terms will exceed $ 16 trillion (up from $ 10 trillion in 2021),” he added.
He pointed out that the Organisation of Economic Co-operation & Development’s 2021 calculations indicate that the Indian economy would overtake the US by 2048. This would thrust India into the driving seat globally.
He said the four engines that could power India to “achieve escape velocity from the emerging economy orbit and take off towards becoming an economic superpower” include demographics dividend, manufacturing, exports and internalisation.
“If manufacturing were to grow at 10% – the target set by the ‘Make in India’ campaign – its share would reach 25% in 2030-31. India would become the manufacturing shop floor of the world,” he said.
To achieve this manufacturing sector must adapt to the fourth industrial revolution (automation; data exchange; cyber-physical systems; the internet of things; cloud computing; cognitive computing; the smart factory; and advanced robotics) and India must develop a skilled labour force by stepping up investment in human capital.
He said raising India’s share in world exports to at least 5% was within reach.
According to Dr Patra, India has to focus on addressing four major challenges which include recovering the loss of output and livelihood faced due to the pandemic, closing the infrastructure gap, developing a high-quality labour force and meeting the target of making India greener and cleaner by augmenting an estimated cumulative investment of $10.1 trillion to meet net-zero commitments by 2070.
Indian economy is the sixth-largest economy in the world as per IMF. The economy was at 3.18 in the fiscal year 2020-21 and is expected to see a 5 trillion mark by 2027 as per the latest IMF predictions.
It should also be noted that for decades now, Indians have been playing a pivotal role in the success of technology powerhouses globally. India has produced the leaders of the world’s most influential companies, who are playing a vital role in their growth which is something not many nations can boast of.
There is a whole range of companies starting from IBM, Cognizant, and Adobe to tech giants like Google and Microsoft, mobile mammoths like Nokia, and content kings like Only Fans, where the CEOs are of Indian origin and are taking the game to great heights, no doubt. But, Indian dominance does not end there. There is a pantheon of Indian-origin CEOs of major global companies and the numbers are only growing. Several major companies, including Big Tech like Alphabet, Microsoft and Twitter, All have an Indian name on their list of heads.
Their success as CEOs and chairpersons certainly contributes to market confidence and inspires millions of youths back in India to dream big. Of course, many more will follow in their footsteps and we will have more Indian names in the highest echelons of businesses, no doubt.
India, with its $3 trillion economy, is making waves globally with new partnerships and markets thereby creating new work opportunities for the aspiring youth. Having navigated the two difficult waves of the Covid-19 pandemic relatively unscathed, India is reading along with its partners like Australia, Japan, and the US to displace China with alternative and sustainable supply Chains.
All this success is no doubt the hard work put in by Prime Minister Narendra Modi and his government in the last eight years, and holding on to the tag of the fastest-growing economy should be celebrated as a big leap forward.
According to the experts, if data available from credible agencies like International Monetary Fund (IMF) and World Bank are anything to go by, then India may be the only large economy that would post GDP growth beyond 7 per cent by 2025.
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