No time to celebrate, yet

India becoming third-largest economy in 2027 means little to its citizens living in less than $10 a day

- DIPAK MONDAL

PRIME Minister Narendra Modi while addressing a crowd of who’s who of the corporate, bureaucratic and political world in New Delhi made a promise that in his third term as Prime Minister, India will be the third-largest economy.

For India (with current GDP size of $3.38 trillion) to become the third-largest economy, it needs to go past Germany ($4 trillion) and Japan ($4.2 trillion). While India’s nominal GDP in dollar terms has been growing at an average 6.3% over the past 10 years, Germany is growing at 1.43% while Japan’s GDP has declined at 3.8% over the past decade.

“Keep in mind the two economies we need to surpass are in a shrinking phase with an aging population and weakening demand,” says Debopam Chaudhary, chief economist, Piramal Enterprises.

Not a mean feat

Nonetheless, India still has some catching up to do. “India should surpass both Japan & Germany in 2027 at the current rate of growth,” says a report by Dr. Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India.