India’s $5 trillion economy goal a challenging task; IMF’s Gita Gopinath tells why

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December 18, 2019 12:32 PM

While Narendra Modi-led government has set eyes on scaling Indian economy to $5 trillion by 2024, IMF chief Gita Gopinath has expressed reservations on the same and said that the goal is extremely challenging.

Earlier, the chief economist at the International Monetary Fund, Gita Gopinath had advised Indian government to undertake structural reforms. (Reuters)

While Narendra Modi-led government has set eyes on scaling Indian economy to $5 trillion by 2024, IMF chief Gita Gopinath has expressed reservations on the same and said that the goal is extremely challenging. India’s dream to become $5 trillion economy is a good aspiration, but it is extremely challenging to reach, mathematically, she said at India Economic Conclave, ET Now reported. “It would require India to grow in nominal dollar terms at a 10.5% each year for the next five years, and for the last six years, India grew in dollar terms by 6%,” she added. Currently, the Indian economy is nearing $3 trillion mark. 

Also Read: Modi’s $5 trillion economy dream has started to look impossible; will India miss the bus?

Earlier, the chief economist at the International Monetary Fund, Gita Gopinath had advised Indian government to undertake structural reforms such as bank clean-up and labour reforms as the country is currently reeling under slowdown in domestic demand. “Given the cyclical position and the structural challenges of the Indian economy at this point, we recommend that policies focus on managing the slowdown in domestic demand, and on boosting productivity growth and supporting employment creation in the medium term,” Gita Gopinath told PTI in an interview, early this week. She also said that the time is ripe for the Indian government to push structural reforms as the government is still in the early days of its second mandate. India’s GDP growth has slowed for the sixth consecutive quarter to 4.5%. The manufacturing sector is witnessing a slump as domestic consumption remains low.

Meanwhile, Hinduja Group co-chairman Gopichand Hinduja recently said that the $5 trillion target is achievable if the government sheds the British style of bureaucracy to move faster. “$5 trillion economy is an achievable target. The initiatives taken by Modi are great and his vision is excellent but his team has to be fast,” he said at the India economic Conclave 2019. 

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