New Delhi: Prime Minister's Economic Advisory Council (EAC-PM) member Sanjeev Sanyal on Thursday said India will become a US $ 4 trillion economy in 2024-25 and will overtake Japan as the world's fourth largest economy by the beginning of the next financial year. Will become a big economy.
Sanyal further said that considering various constraints, including the country's weaving exports, an economic growth rate of 7 per cent would be a very good growth rate for India.
"So, in this financial year, we will become a US$4 trillion economy," he said at an event here.
Recently, Finance Minister Nirmala Sitharaman said that India is expected to become the world's third largest economy by 2027, leaving behind Japan and Germany.
Currently, in US dollar terms, India is the fifth largest economy with a size of approximately US$3.7 trillion in nominal terms.Sanyal said that Japan is now slightly ahead of us with US dollars 4.1 trillion.
"So, either early next year or you know this year, we will surpass Japan and become the fourth largest economy in the world," Sanyal said.
According to him, Germany is a US$4.6 trillion economy and it is not growing so it is a stagnant target.
"Maybe in two years we will overtake Germany. So, I think in terms of becoming the third largest economy in the world, we are very close to the goal now," he said.,
Sanyal argued that the government should not insist on any fiscal steps to boost economic growth to 8-9 per cent.
“If you figure it out, great, but a growth rate of about 7 percent over time is a very good growth rate.
“We shouldn't get too excited about 9 percent,” he said.
Sanyal said that compounding is the most important thing in development as it will generate jobs and taxes.
While the Asian Development Bank (ADB) and Fitch Ratings have projected India's growth rate at 7 per cent, the International Monetary Fund (IMF), S&P Global Ratings and Morgan Stanley have projected a growth rate of 6.8 per cent for FY2025. ."Don't get sentimental about trying to achieve very high growth rates in any particular year," he stressed.
Sanyal said that for example, there are other countries in South Asia, which were in our situation in the mid-90s.
"You remember Indonesia, Thailand and so on and for some time they were doing very well. And then it all came crashing down in the Asian crisis," he said.
Sanyal stressed that there is no need to tamper with the financial system that is trying to support growth."Don't mess with your fiscal system, your monetary system, your current account and so on," he said.
Responding to a question on internationalization of the rupee, Sanyal said it is about turning the rupee into a hard currency.
"We're just aspiring to be a hard currency like others over the next decade, we're not trying to be the world's anchor currency," he said.
Sanyal said India's limited objective is to convert the rupee into a hard currency over the next decade in the context of its widespread use as a currency in which people trade, particularly, the country's own business.
He said, “It is a currency in which other governments of the world hold their reserves, being part of the IMF SDR basket.Therefore, it is a limited objective."
In that context, Sanyal said, the government has done a few things, including the inflation rate targeting mechanism.
He said, "...so that the rupee essentially becomes a commonly used hard currency, to be used at least for things related to India."
Sanyal further said that considering various constraints, including the country's weaving exports, an economic growth rate of 7 per cent would be a very good growth rate for India.
"So, in this financial year, we will become a US$4 trillion economy," he said at an event here.
Recently, Finance Minister Nirmala Sitharaman said that India is expected to become the world's third largest economy by 2027, leaving behind Japan and Germany.
Currently, in US dollar terms, India is the fifth largest economy with a size of approximately US$3.7 trillion in nominal terms.Sanyal said that Japan is now slightly ahead of us with US dollars 4.1 trillion.
"So, either early next year or you know this year, we will surpass Japan and become the fourth largest economy in the world," Sanyal said.
According to him, Germany is a US$4.6 trillion economy and it is not growing so it is a stagnant target.
"Maybe in two years we will overtake Germany. So, I think in terms of becoming the third largest economy in the world, we are very close to the goal now," he said.,
Sanyal argued that the government should not insist on any fiscal steps to boost economic growth to 8-9 per cent.
“If you figure it out, great, but a growth rate of about 7 percent over time is a very good growth rate.
“We shouldn't get too excited about 9 percent,” he said.
Sanyal said that compounding is the most important thing in development as it will generate jobs and taxes.
While the Asian Development Bank (ADB) and Fitch Ratings have projected India's growth rate at 7 per cent, the International Monetary Fund (IMF), S&P Global Ratings and Morgan Stanley have projected a growth rate of 6.8 per cent for FY2025. ."Don't get sentimental about trying to achieve very high growth rates in any particular year," he stressed.
Sanyal said that for example, there are other countries in South Asia, which were in our situation in the mid-90s.
"You remember Indonesia, Thailand and so on and for some time they were doing very well. And then it all came crashing down in the Asian crisis," he said.
Sanyal stressed that there is no need to tamper with the financial system that is trying to support growth."Don't mess with your fiscal system, your monetary system, your current account and so on," he said.
Responding to a question on internationalization of the rupee, Sanyal said it is about turning the rupee into a hard currency.
"We're just aspiring to be a hard currency like others over the next decade, we're not trying to be the world's anchor currency," he said.
Sanyal said India's limited objective is to convert the rupee into a hard currency over the next decade in the context of its widespread use as a currency in which people trade, particularly, the country's own business.
He said, “It is a currency in which other governments of the world hold their reserves, being part of the IMF SDR basket.Therefore, it is a limited objective."
In that context, Sanyal said, the government has done a few things, including the inflation rate targeting mechanism.
He said, "...so that the rupee essentially becomes a commonly used hard currency, to be used at least for things related to India."
