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India to be 5th largest economy this year: IHS Markit

Jun '19
India to be 5th largest economy this year: IHS Markit
India is projected to overtake the United Kingdom to turn the world's fifth largest economy this year and forecast to surpass Japan to become the second in the Asia-Pacific region by 2025, according to a report on the Bharatiya Janata Party’s victory in the elections by IHS Markit, which said the economic outlook ‘looks positive’ for the party’s second term.

The gross domestic product (GDP) growth forecast will average around 7 per cent per year over the 2019-2023 period, it said.

India’s contribution to global GDP growth momentum will also increase and the country will also play an increasingly important role as one of the Asia-Pacific region's major economic growth engines, helping to drive Asian regional trade and investment flows, a news agency reported citing the IHS Market document.

A top policy priority for the government will be to continue to drive reforms in the public sector banks and reduce the burden of non-performing loans on their balance sheets, IHS said.

While manufacturing sector's share in the GDP is still at 18 per cent against the target of 25 per cent, around 7.5 million persons are projected to join the Indian workforce per year on average over the next two decades.

This will create strong pressure on the Indian Government to generate sustained rapid employment growth in both the manufacturing and services sectors to prevent rising unemployment and underemployment in the Indian labour force, said the London-based global information provider.

When the ‘Make in India’ strategy was launched in 2014, Prime Minister Narendra Modi had set a target of raising the contribution of manufacturing to GDP to 25 per cent. However, by 2018, the manufacturing sector share of GDP is still at 18 per cent, which leaves a substantial gap to bridge to achieve this target, it said.

Since Prime Minister Modi took office in 2014, Indian GDP has increased by 50 per cent, from $2 trillion in 2014 to an estimated $3 trillion in 2019, a total net increase of $1 trillion in GDP in just five years. (DS)

Fibre2Fashion News Desk – India

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