New Delhi: 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 to the Economic Times 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.
PM Modi also said that the labour and agricultural reforms undertaken by his government in the last couple of months will help increase growth and returns in the manufacturing and agriculture sectors besides sending positive signals to the world about India’s intent.
Terming the labour reforms as pro-worker, Modi said the simplified labour codes will lead to a stable regime for businesses to invest and create a win-win situation for the employee and the employer.
The PM also reiterated that the government will take all measures needed to constantly stimulate the economy in a timely manner while ensuring overall macroeconomic stability. He added that the government’s big push towards investment and infrastructure will be the driving force behind economic recovery.
Citing data from Moody’s, Modi pointed out how 154 greenfield projects from the US have come to India in 2020, compared to 86 in China, 12 in Vietnam and 15 in Malaysia.
“This is a clear indication of global confidence in India’s growth story going forward. We have laid strong foundations to make India the foremost manufacturing destination,” he said.
Modi also highlighted how India has been doing well in containing the pandemic. He pointed out how India’s case fatality ratio is among the lowest in the world and the deaths per million much lower than what is seen in many developed nations.
India’s case fatality rate is around 1.5 per cent and deaths per million is around 86.