REVISITING THE $5 TRILLION ROADMAP

The jump to the $5 trillion orbit, from the current $3 trillion, is going to be powered by green energy, production-linked manufacturing, digital drive, Rs 145 lakh crore-plus infrastructure pipeline, and targeted incentives for MSMEs

IT ALL BEGAN on June 15, 2019. Prime Minister Narendra Modi, at a meeting of the National Development Council (NDC), for the first time, articulated India's ambition of becoming a $5-trillion economy. The NDC initially set 2024 as the target year, but it was changed to FY25 in the 2019-20 budget in July that year.

There couldn't have been the worst start to this grandiose plan, though. The Modi government had just been swept back to power with a massive mandate. It was on cloud nine when it floated the $5 trillion ideas. The economy, however, had begun showing signs of fatigue from the second half of 2019. Covid and the subsequent lockdowns delivered the knockout punch making 2020-21 the worst year for the Indian economy, which contracted a whopping 7.3 per cent (later revised to 6.6 per cent).

In Q2 of 2019-20, real GDP growth slipped to 4.61 per cent, a decadal low. It further fell in Q3 and Q4 to 3.28 per cent and 3.01 per cent respectively. On January 7, 2020, the National Statistical Office (NSO) announced the advanced GDP estimates for 2019-20 and projected that GDP at current prices for FY20 is likely to be at Rs 204.42 lakh crore, as against Rs 190.10 lakh crore in FY2018-19, showing a growth rate of 7.5 per cent in nominal terms. In real terms, this came out to be at 5 per cent, down from 6.1 per cent of real growth in FY19.

Even the rate of Gross Fixed Capital Formation (GFCF), which represents investments in the economy, was estimated at 28.1 per cent and 31.1 per cent at current and constant prices, respectively. This was down from 29.3 per cent and 32.3 per cent recorded in FY19.