A Review of Indian Economy; Growing Over 7% -Plus And $5 Trillion by 2027

A Review of Indian Economy; Growing Over 7% -Plus And $5 Trillion by 2027 [Credit-Only IAS]

The Ministry of Finance published a report titled 'The Indian Economy- A Review' that said the Indian economy is likely to grow at over 7% and is expected to have a GDP of $5 trillion in the next three years.

The report was prepared by the Office of the Chief Economic Adviser, which expected the Indian economy to be the third-largest economy in the world in the next three years.

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The Indian Economy's Review by Chief Economic Advisor:

Chief Economic Adviser V Anantha Nageswaran said it now appears that the Indian economy will achieve a growth rate at or above 7% for FY24, and some predict it will attain another year of 7% real growth in FY25 as well.

Mr. Nageswaran is hopeful that if the prognosis of FY 25 turns out to be, it will mark the fourth year post-pandemic that the Indian economy will have grown at or above 7%. It would be an impressive achievement, testifying to the resilience and potential of the Indian economy. It will augur well for the future also.

Chief Economic Adviser V Anantha Nageswaran [Credit-CNBC-TV18]

He clarified that this is not the Economic Survey of India prepared by the Department of Economic Affairs. That will come before the annual Budget after the general elections. 

Generally, the Economic Survey for the ongoing financial year is presented in Parliament just a day before the Budget for the next financial year on February 1.

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Risks of Indian Economy in The Review Report:

The Review report highlighted the only elevated risk of geopolitical conflicts as an area of concern. As per the report, the global economy is struggling to maintain its recovery after Covid-19.

The Review report mentioned the successive shocks that have buffeted the economy, like supply chain disruptions. If these traits persist they will impact trade flows, transportation costs, economic output, and inflation worldwide.

The emergence of Artificial Intelligence and its use of vast scale will pose profound and troubling questions for growth in services trade and employment. He said the technology might remove the advantage of cost competitiveness that countries exporting digital services enjoy.

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The Halt-Generating Trends at The Global Level:

 

The Chief Economic Adviser also listed three trends for the coming year. These are the end of the era of hyper-globalization in global manufacturing, the advent of Artificial Intelligence, and the energy transition challenge.

He added that there is a need to lower logistics costs and more investment in product quality. Those areas should be held on to and expand market share where India has an advantage.

The Halt-Generating Trends at The Global Level [Credit-ETV Bharat]

Highlighting the era of hyper-globalization, which is over in global manufacturing. It does not mean that de-globalization will be upon us anytime soon. Now, Countries are discovering the enormous integration of global supply chains that has taken place in the past few decades. 

So, the alternative for the global supply chain will take a much longer time. This time-consuming process cannot deter Governments from pursuing onshoring and friend-shoring of production with a consequent impact on transportation, logistics costs, and prices of products finally.

In the Energy sector, there are challenges at the transition level. Concerns over the rising temperatures have led to a single-minded focus on reducing carbon emissions. 

There has been a persistent demand from international organizations and advanced nations for developing nations to wean themselves off fossil fuels. However, the technological and resource obstacles remained and are not offered by developed countries but pressing to switch to greener energy.

The review report mentioned that it is a reality, and in the short run, there is a trade-off between economic growth and energy transition. Countries can ill-afford to sacrifice economic growth for energy transition due to the global challenges of the post-COVID era.

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Indian Economy on The Right Track:

India is walking the fine line between the two more skillfully than developed or other nations. By installing non-fossil fuel-based power generation capacity running ahead of targets, the report added.

Due to firm policy adaptation and implementation in the last decade, the Indian economy is better placed than ever to take on three key challenges. The historically unprecedented rate of infrastructure built by the Union government has taken the overall public sector capital investment from Rs. 5.6 lakh crore in FY15 to Rs. 18 lakh crore in FY24.

As per the FY24 budget, that rise is approximately 3.3X. The infrastructure, whether physical or digital, the total length of highways, freight corridors, number of airports, metro rail networks, the trans-sea link, and the ramp-up of physical or digital payment systems has shown real, tangible, and transformative progress in the last ten years.

Indian Economy on The Right Track [Credit-PGurus]

The financial sector is also presenting a healthy front. Its balance sheet is much stronger, so it is lending and willing to lend. He presents data that non-food credit growth, excluding personal loans, is growing at double-digit rates.

The pursuance of inclusive development finds Indian households in good financial conditions. 51 crore bank accounts under Jan Dhan Yojana now have total deposits of over Rs. 2.1 lakh crore and more than 55% of them are women.

The review report also singled out two other significant achievements. The management of COVID-19 and the record vaccination. These are being instrumental in the quick recovery of the economy. 

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In a similar way, the deft management of the crude oil supply at reasonable prices in the last two years is noteworthy. Humans are incapable of appreciating these unseen measures like the mistakes not made and the risks avoided. You can find counterfactuals all around.

The government is resolving longstanding problems like deficient physical infrastructure and financial exclusion, aspirations rise, and expectations shift higher.

Mr. Nageswaran said today that many young Indians not only aspire to a better life but are also confident that it will happen in their lifetime. The current generation feels that they have a better life than their previous generations and will succeed and do better than them. Now Indians do India does.

Thanks and Regards