India skids on GDP runway

Washington: There is more bad news -- at a time when India has set an ambitious target of becoming a $5 trillion economy in GDP terms by 2024, and a $3 trillion economy in the current financial year.

Contrary to the build-up, India has slipped two ranks in the World Bank’s GDP pecking order in 2018, and is now the seventh largest economy with the United Kingdom and France ahead of it, data from the international lending institution said.

In 2017, India had overtaken France as the sixth largest economy. According to news reports, India had also overtaken the United Kingdom for a short while. In 2018, after slipping two notches, India’s GDP was $2.72 trillion, while that of the United Kingdom was $2.82 trillion and France was $2.77 trillion.

India skids on GDP runway

The world’s top four economies in the World Bank list in 2018 were the United States, with a GDP of $20.5 trillion, followed by China ($13.6 trillion), Japan ($4.9 trillion) and Germany ($3.9 trillion).

Earlier this year, India lost the fastest growing economy tag, too, falling behind China. The country grew at its slowest pace in five years at 5.8% during January-March quarter in financial year 2018-19. Growth during 2018-19 declined to 6.8% from 7.2% a year ago.

In its Union Budget, the Narendra Modi government had declared that it intends to make India a $5-trillion economy by 2024. However, not every economist was taken in by the hype. Many feel the target is too ambitious given the ground realities.

PM Modi had said in February that India would continue to be the fastest-growing large economy, and could become the second-largest economy in the world by 2030.

However, in June, former Chief Economic Adviser Arvind Subramanian published an academic paper in which he claimed India’s growth was overestimated by 2.5% points per year between 2011-‘12 and 2016-’17

A period when both the United Progressive Alliance and National Democratic Alliance were in power. The claim has been refuted by the Economic Advisory Council to the prime minister.

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