India needs effective policy initiatives to become 5 trillion dollar economy

India is expected to become the third-largest economy in the world with a GDP of 5 trillion dollar in the next three years and touch 7 trillion dollar by 2030 on the back of continued reforms, the Finance Ministry has claimed early this year.

- Tushar K Mahanti

In a note “Roadmap for $5 trillion economy in light of global economic and geopolitical circumstances” last January, the finance ministry said that India was a $3.57 trillion economy in FY 24 and at the annual trend growth of around 6.5-7%, the target of $5 trillion would be achieved by 2028-29. And if the first advance estimates of GDP for FY25 projected a GDP growth rate of 6.4%, a four-year low, the government called it a transitory blip because of general elections last year and hoped to regain growth momentum soon.

Most of the international development organisations and rating agencies are in fact, seconding government's claims and are projecting a high GDP growth trend in the coming years. The World Bank projected India's GDP growth at 6.5% for FY25, with a potential for 6.7% growth in the following two fiscal years (FY26 and FY27). The IMF expected India's growth to remain robust at 6.5% for both 2025 and 2026. Fitch Ratings has projected India's GDP to grow at 6.5% in 2025-26 while Moody's Ratings in its latest Banking System Outlook - India report, released recently has projected the country's real GDP growth to exceed 6.5% in FY 26.

India remains the fastest-growing major economy