India can become $9.5T economy by 2035: Finance Commission Chairman
What's the story
Arvind Panagariya, the Chairman of the 16th Finance Commission, has said he is confident India can become a developed nation by 2047. He said if India continues to grow at 10.1% in dollar terms at current prices for the next 10 years, it could be a $9.5 trillion economy. He was speaking at the 49th Civil Accounts Day celebrations in New Delhi today.
Growth prerequisites
Panagariya outlines prerequisites for sustained growth
Panagariya stressed the need to maintain macroeconomic stability and democratic governance for sustained growth. He said these are the necessary conditions for India to keep growing. Panagariya also pointed out that India's per capita income in 2023-24 was $2,570, which means there is a lot of room for it to increase further in the future.
Income goal
India's journey to high-income threshold by 2047
To achieve the high-income mark of $14,000 per capita income by 2047, India must sustain a 7.3% growth rate. "Per capita income of $14,000 is the threshold that India must cross to classify as a high-income country at 2023 dollar prices," Panagariya said. He also noted that with a projected population growth rate of only 0.6% annually till 2047, the stage is set for continued growth.
Economic trajectory
Perspective on India's economic trajectory
Panagariya traced India's high-growth journey back to 2003-04 when the economy began growing at 7.9%. Over the last two decades, the country has posted a growth rate of 7.8% in dollar terms at constant prices. However, he admitted that the rupee has depreciated by over 1% per year in this period. Despite recent GDP growth trends with tepid estimates for Q1, Q2 of FY25 compared to previous quarters, Q3 witnessed a major improvement.
Poverty reduction
View on poverty reduction in India
On the issue of poverty reduction, Panagariya said that no matter how you measure it, poverty has reduced massively in the last two decades. He said, "No matter how you measure poverty, during the last 21 years, it has reduced massively as a group average." This reiterates his optimism about India's socio-economic progress along with economic growth.