Kolkata. International Monetary Fund (IMF) Executive Director Krishnamurthy Subramanian said on Wednesday that if the growth rate in dollar terms remains at 12 percent, the size of the Indian economy can reach $ 55,000 billion by 2047. He said at a program of industry body CII here that setting an inflation target since 2016 has helped in bringing down the inflation rate in the country to an average of five percent.
Subramanian, who was the Chief Economic Advisor from 2018 to 2021, said that the average rate of inflation before 2016 was 7.5 percent. He said that if the real growth rate remains at eight percent with inflation at five percent, then the growth rate at market price is expected to be 13 percent. Subramanian said, “In the long run, the fall in the exchange rate of the Indian currency against the dollar by less than one percent will have an impact on the fundamentals of the economy.” In this context, he said that India’s real growth rate in terms of dollar will be 12 percent. In such a situation, the size of the economy will double every six years.
Subramanian said, “The current size of the economy is $3,800 billion. It is estimated to reach $55,000 billion in the year 2047.” He said that it is possible for India to achieve a growth rate of eight percent in real terms i.e. at the base price. According to Subramanian, investment in developed economies has reached a stable state. Improvement in productivity there will be the only source of growth.
The second reason for the country’s eight percent growth rate is the economy becoming more organised. He said that half to two-thirds of the Indian economy still remains unorganised. Subramanian said, “Productivity will increase as the economy becomes more organised. But there is still scope to increase the productivity of India’s organised sector compared to other countries.”