pm-eac-member-sanjeev-sanyal-forecasts-india-as-4th-largest-economy-by-fy25

India is poised to achieve a significant milestone in its economic journey, as projected by Sanjeev Sanyal, a member of the Economic Advisory Council to the Prime Minister (EAC-PM).

 

Sanyal predicts that by the fiscal year 2024-25, India's economy will reach the USD 4 trillion mark, propelling it to become the world's fourth-largest economy, surpassing Japan.

 

Sanyal's optimism stems from India's steady economic growth trajectory, despite facing challenges such as weak exports. He views a 7 per cent growth rate as commendable, considering the prevailing constraints. This fiscal year, India is anticipated to achieve the USD 4 trillion economy milestone, according to Sanyal.

 

Finance Minister Nirmala Sitharaman had earlier indicated India's trajectory towards becoming the world's third-largest economy by 2027, overtaking Japan and Germany. Currently ranked fifth globally in nominal terms, India's economy stands at approximately USD 3.7 trillion.

 

Highlighting Japan's economy slightly ahead at USD 4.1 trillion, Sanyal predicts India's imminent overtaking of Japan's position. He also anticipates India surpassing Germany, currently a USD 4.6 trillion economy, in the near future.

 

Sanyal advocates for a pragmatic approach towards economic growth, cautioning against overly aggressive fiscal measures to achieve 8-9 per cent growth. He emphasises the significance of sustained growth around 7 per cent, citing its positive implications for job creation and revenue generation.

 

While various institutions project India's growth rate for FY25 differently, Sanyal advises against fixating on achieving exceptionally high growth rates in any specific year.

 

He draws attention to Southeast Asian countries' experiences in the mid-90s, cautioning against reckless economic policies that could lead to crises.

 

Regarding the internationalisation of the rupee, Sanyal underscores India's aim to establish the rupee as a hard currency over the next decade.

 

This objective involves enhancing the rupee's prominence in global trade and financial transactions, without aspiring to become the world's anchor currency. Measures such as inflation rate targeting are part of India's strategy to bolster the rupee's international acceptance and utility.

 

Sanyal's insights shed light on India's economic aspirations and the strategic approaches required to realise them. As India continues its journey towards economic prominence, prudent policies and steady growth are essential for sustainable development and global integration.