New Delhi: The country will need to grow by 9% every year for five years continuously and raise aggregate investment rate to 38% of GDP to achieve Prime Minister Narendra Modi's target of turning India into a $5 trillion economy, EY has said.
In its latest edition of Economy Watch, EY said assuming India grows by projected 7% in the current fiscal year ending March 31, 2020, the size of the economy will grow to USD 3 trillion from USD 2.7 trillion in the previous year.
It will have to grow by 9% in each of the five subsequent years to take the size of the economy to USD 3.3 trillion in FY21, USD 3.6 trillion in FY22, USD 4.1 trillion in FY23, USD 4.5 trillion in FY24 and USD 5 trillion in FY25.
"Assuming an inflation rate of 4% which is the target inflation rate as per the Monetary Policy Framework, a real growth rate close to 9% would be required to increase the size of the Indian economy to USD 5 trillion by FY25,” EY said.
“This implies a nominal growth rate of 13%, assuming an average annual depreciation of the rupee viz-a-vis the US$ at 2%," it said.
