Former Reserve Bank of India (RBI) governor C Rangarajan has said reaching the $5-trillion Gross Domestic Product (GDP) target by 2025 is simply out of question at the current growth rate. He mentioned ‘today our economy is about $2.7 trillion and we are talking about doubling this over the next five years at $5 trillion. The required rate of growth to achieve that level is in excess of 9% per annum.’
He added ‘you have lost two years. This year it is going to be six percent growth and next year also it will be probably about seven percent. Thereafter the economy may pick up.’ The interesting thing is, even if you reach $5 trillion, the per capita income in India will grow from the current level of $1800 to $3600. Even then, India will be called low-middle income country.
The definition of a developed country is one whose per capita income is $12000. It will take 22 years for India to grow at 9 percent per annum to reach there. Besides, the economy has been on a steady decline, with growth rate slowing from 8.2% in FY16 to 6.8% in FY19. While the first quarter of current financial year growth slipped to a six-year low of 5%, the best forecast for the second quarter is 4.3%.