India's goal of becoming a $ 5 billion economy by 2025 is impossible, says former RBI governor Rangarajan
CHENNAI: India's goal of becoming an economy of 5 billion dollars by 2025 is not possible with the current economic growth rate, the former governor of the Reserve Bank of India and former president of the Economic Advisory Council of the United States said on Sunday. Prime Minister.
Rangarajan was addressing students as part of a series of conferences on the $ 5 billion economy.
“People have been talking about India becoming a $ 5 billion economy by 2025. It is an aspirational goal. Today, our GDP is close to $ 2.7 billion. Therefore, reaching $ 5 billion is almost close to doubling our GDP, ”he said.
If it has to go from an economy of $ 2.7 trillion to $ 5 trillion, it will take seven years if the economy grows at 9% annually and eight or nine years if it grows at 8% annually, he said.
“It is ruled out to reach $ 5 billion by 2025, since we are not in that region at all. In fact, in the first quarter of the year, GDP growth is 5% and in the second quarter, 4.5%. For 2019-20, the growth rate cannot exceed 5%. By 2020-21, perhaps the economy can recover and even then, growth cannot exceed 6%. Therefore, we are not close to 8% or 9% of the growth required to reach the $ 5 billion economy, ”he said.
He said a sustained growth rate of the economy between 8% and 9% was needed to achieve it and that per capita income should also double from $ 1,800 to $ 3,600.
On the economic slowdown, he said: “From now on, the economy is slowing down. GDP, which is a measure of the overall performance of the economy, has slowed considerably. The investment rate has fallen from 35.2% six years ago to around 27% now. There is a significant decrease in the investment rate. If the economy needs to grow, the investment rate is one of the important factors. We have to address the problem.