India can aspire to become a seven trillion-dollar economy by 2030, according to the “The Indian Economy: A Review written by the Chief Economic Advisor to the government, V Anantha Nageswaran and his team of economists. The 74-page document is not the Economic Survey of India prepared by the Department of Economic Affairs (DEA), but rather a document that takes stock of the state of the Indian Economy and its journey in the last decade.
The review further stated that reforms undertaken in the last decade by the central government have formed the foundation of a resilient partnership governance ecosystem and have restored the ability of the economy to grow healthy. “There are good reasons to believe India’s economic and financial cycles have become longer and stronger. Consequently, India is poised for sustainable brisk growth in coming years,” the review said.
The Chief Economic Advisor has pegged the growth rate of the Indian economy to be seven percent in fiscal year 2025 after growing at or above seven percent in 2023-2024. This will get fillip from resilient domestic demand despite risks and uncertainties in global economic landscape.
“If the prognosis for FY 2025 turns out to be right, that will mark the post-pandemic that the Indian economy will have grown at or over 70 percent. That would be an impressive achievement testifying to the resilience and potential of the Indian economy, its augers well for the future,” Nageswaran said in the review.
Meanwhile as per National Statistical Office (NSO), the Indian economy is estimated to grow 7.3 percent in 2023-2024, while the Reserve Bank of India (RBI) projected s seven percent growth rate for the current fiscal year. “It is one thing to grow at 8-9 percent when the world economy is growing at 4 percent, but it is another thing to grow at or above seven percent when the global economy is struggling to grow at two percent,” Nageswaran said.
As per the review, the robust domestic demand has driven the economy to a seven percent plus growth rate in the last three years. “The robustness seen in domestic demand namely private consumption and investment, traces origin to the reforms and measures implemented by the government over the last ten years, the review of the economy said.
“The supply side has also been strengthened with investment in infrastructure both physical and digital and measures that aim to boost manufacturing. These have combined to provide an impetus to economic activity in the country,” according to the review. Only the elevated risks of geopolitical conflicts are an area of concern. Priority areas for future reforms include skilling, learning outcomes health, energy, security, reduction in compliance burdens for MSME and gender balancing in the labour force,” it said.
Challenges before Indian Economy
The CEA also highlighted the challenges in front of thr Indian economy and said that recent events in the Red Sea may have brought back concerns over reliance on global supply chains, further aggravating the slower growth in global trade in 2023. “Exporting one way’s growth will not be easy. The global economy is struggling to maintain post recovery because successive shocks have buffeted it. Supply chain disruptions have returned in 2024, the CEA said.
Nageswaran further said the “advent of Artificial Intelligence (AI) with the profound and troubling questions it poses for growth in services trade and employment since technology might remove the advantage of cost competitiveness that countries exporting digital services enjoy. Third, and arguably the most important is the energy transition challenge.”
The review of the economy also listed that concerns over rising temperatures have led to a single-minded focus on reducing carbon emissions, amidst the determination that the emission of greenhouse gases, particularly carbon, is the most significant causal factor.