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Hopefully, it is quite possible and likely. However, it could be very difficult and challenging. Actually, it will be better to take this ambitious vision of the Indian Prime Minister Narendra Modi as optimistic and motivational, rather than a firm & formal declaration or a guaranteed economic reality. The significance of this vision is that it can certainly boost the pace of economic growth in India in the next five years, and can raise the level of its nominal GDP to near the targeted $5 trillion by 2024-25. In 2019, India had the sixth-largest economy in the world with a nominal GDP of around $2.7 trillion. If India achieves the said target by 2025, then it will emerge out as the fourth-largest economy, behind the US, China, and Japan, and a major global economic powerhouse by then.
According to the legal experts, currently, India is one of the fastest growing economies in the world, and is well and truly on its way to becoming a $5 trillion economy by the year 2024-25. To achieve the target, India needs to grow with an average annual growth rate of 10-12% in dollar terms for next five years (as against 6.8% in 2018-19), and raise its aggregate investment rate to around 38% of its GDP every year, as against 31.3% in 2018-19, according to experts, including the Ernst & Young (EY). Again, India's inflation (consumer price index) shall be required to be kept below or around 4% (the target inflation rate according to the Monetary Policy Framework), to ensure commensurate increase in the purchasing power of money. According to the finance ministry, the inflation in India has been kept under check and at around 4.5% in the last five years, and now it is on a declining path to reach 3.4% in 2018-19. Again, to support the target rate of GDP growth, the rupee should not depreciate further against the dollar. As per an PTI report, to achieve the target GDP growth, the exchange rate depreciation must not be higher than 2% per annum.
In addition to breakthrough ideas and initiatives, and research & innovations in all significant economic sectors, the following facts and factors will also be of great importance, for realizing the $5 trillion goal by 2024-25:
- India's favorable 63rd ranking among 190 countries in the World Bank's 2020 Ease of Doing Business Report
- Growth of MSME sector, which contributes massively to the national GDP, exports, and employment
- Creative research and innovations in various sectors, including the sectors of agriculture, healthcare, education, telecommunications, and many other sectors related with manufacturing and services.
- India's striking and larger presence in the global markets
- India's determination to invest Rs 100 Lakh Crore over the next five years, as per 2019 Budget
- Steady growth of its exports to $1 trillion from around $500 billion at present
- Further infrastructural development, and effective measures for boosting the overall investment rate necessary to meet the goal, essentially including regular and massive investments in the private sector
- And, many other viable measures to maintain the targeted double-digit annual GDP growth rate and sustainability.
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