India can still become a $5-tn economy by 2024, PM Modi shows hope despite Covid setback

Date:10-30-2020

Despite the setback on account of the Covid-19 pandemic, Prime Minister Narendra Modi is hopeful that India can still achieve the $5 trillion economy target by 2024.

In an interview on Thursday, Modi said India is on its way towards an economic recovery as shown by 5 indicators — record production and procurement in agriculture, record FDI inflows, demand resurgence as shown by growth in auto and tractor sales, improvement in manufacturing and addition to the Employees’ Provident Fund Organisation (EPFO) subscriber base, showing an improvement in the job market.

In addition, all-time high foreign exchange reserves as well as improvement in indicators like freight movement indicate broad based recovery, he said.

“Today, our country is optimistic of the future, it is optimistic of reaching the $5 trillion target. And this optimism gives us confidence. So what if we could not move at the desired pace this year due to the pandemic! We will try and run faster in the next year to make up for the loss. Nothing great ever gets done if we get deterred by obstacles in our path. By not aspiring, we guarantee failure,” he said.

“India is the third largest economy in terms of purchasing power parity. We want India to become the third largest in terms of current US dollar prices as well. The $5 trillion target will help us achieve that,” Modi said in response to a question on whether India can become a $5 trillion economy by 2024.

He added, “Also, our government has a track record of meeting our targets.”

The size of the Indian economy was around $2.7-2.8 trillion as of March 2020.

Even before the pandemic, economists had termed it almost impossible for India to become a $5 trillion economy by 2024 as GDP growth slowed down to 4.2 per cent in 2019-20, much lower than the double digit growth needed to achieve the target. The pandemic has made matters worse with the economy expected to contract by double digits in the current fiscal.