Source : The Times of India
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New Delhi: With India surpassing the United Kingdom (UK) to become the world’s fifth largest economy, a report by the State Bank of India (SBI) suggests that the country will outstrip two other major economies to become the third-largest economy by 2029.
“The path taken by India since 2014 reveals the country is likely to get the tag of third largest economy by 2029,” the report said.
According to Bloomberg, India had surpassed Britain to become the world’s fifth largest economy in end-March 2022. India extended its lead in the first quarter, showed the GDP figures from the International Monetary Fund. “On an adjusted basis and using the dollar exchange rate on the last day of the relevant quarter, the size of the Indian economy in ‘nominal’ cash terms in the quarter through March was $854.7 billion. On the same basis, UK was $816 billion,” stated the Bloomberg report.
“From being one of the fragile five countries to becoming the fifth largest economy in the world after overcoming the deadly pandemic shows that India has reached a remarkable milestone at a time when most of the countries are struggling to fight against stagflationary pressures. However, the roots had been cemented from the time India was able to emerge from the long period of policy paralysis and adopted a series of important reform measures. A pro-business policy framework, removal of structural rigidities and continuation of reforms are some of the major initiatives taken over the last few years to unleash India’s growth potential,” said Dr.Arun Singh, Global Chief Economist, Dun & Bradstreet India.
But, as per the SBI report, India had surpassed the UK as the fifth largest economy as early as December 2021 itself.
The research report from SBI’s Economic Research Department highlighted that Gross Domestic Product (GDP) growth rate for FY23 is estimated between 6.7-7.7 per cent, but it is normal to have a 6-6.5 per cent growth due to global uncertainties.
The path taken by India since 2014 reveals the nation is likely to get the tag of the third-largest economy in 2029, a movement of seven places upwards since 2014 when India was ranked 10th, the report said.
“India should surpass Germany in 2027 and most likely Japan by 2029 at the current rate of growth,” the report said.
The share of India’s GDP is now at 3.5%, as against 2.6% in 2014 and is likely to cross 4% in 2027, the current share of Germany in global GDP, said the report.
In coming days India is likely to be the beneficiary as China slows down in terms of new investment intentions
“Global tech major Apple’s recent decision to shift part production of its flagship iPhone 14 model for worldwide shipping from India, with a negligible time lag of a few weeks post its slated launch on September 7, bears testimony to such an optimism! The move by Apple, the most recognisable face of tech infused innovation in the last two centuries, that captures aspirations of an upwardly mobile population should open the flood gates for other major conglomerates to follow suit,” said Dr. Soumya Kanti Ghosh, Group Chief Economic Adviser at State Bank of India.
A broad-based growth of empowerment will also lift India’s per capita income from current levels and this could also as a force multiplier for a better tomorrow, added Ghosh.
“At the beginning of 21st century, China embarked on an accelerated growth path occupying the second largest economy tag. We believe, withright policy perspective and realignment in global geopolitics our current estimates might even undergo an upward revision,” he said.
Last week, Ghosh revised downwards the full-year growth forecast to a low 6.8 percent from 7.5 percent earlier for FY23, citing “the way below GDP numbers for the first quarter”.
