India must sustain an average growth rate of 8% over the next two decades to realize its ambition of becoming a developed nation by 2047, according to the Economic Survey 2024-25 tabled in Parliament by Finance Minister Nirmala Sitharaman.
The report underscores that this growth target is crucial for achieving the nation’s vision of “Viksit Bharat” as it marks its centenary of independence. However, it cautions that global political and economic factors will inevitably influence India’s growth trajectory.
The International Monetary Fund (IMF) projected in its October 2024 report that India would reach a USD 5 trillion economy by 2027-28 and USD 6.3 trillion by 2029-30, implying an annual nominal growth rate of 10.2% in USD terms during the period from 2024-25 to 2029-30.
Despite these optimistic projections, recent figures suggest a slowdown. India’s economy grew by only 5.4% in real terms during the July-September quarter of the current fiscal year, falling short of the Reserve Bank of India’s (RBI) 7% forecast. The April-June quarter also witnessed a lower-than-expected growth rate.
In its latest monetary policy announcement, the RBI revised India’s growth forecast for 2024-25 downward to 6.6% from the earlier estimate of 7.2%. Meanwhile, the government expects the growth rate to hover around 6.4%.
The survey highlighted that India’s GDP grew by 8.2% in 2023-24, maintaining its position as the fastest-growing major economy. Previous years recorded growth rates of 7.2% in 2022-23 and 8.7% in 2021-22. For 2025-26, growth is projected to be between 6.3% and 6.8%.
To bolster long-term industrial growth, the government plans to prioritize research and development (R&D), micro, small, and medium enterprises (MSMEs), and the capital goods sector, aiming to improve productivity, foster innovation, and strengthen global competitiveness.
The survey emphasized that enhancing economic freedom for individuals and small businesses remains a critical policy priority to sustain India’s medium-term growth prospects.
(Inputs from ANI)