HYDERABAD: As long as India is able to clock a GDP growth rate of 8% per annum in real Rupee terms, it has the potential to emerge as the Sachin Tendulkar of the global economy with a $55 trillion economy by 2047 when the country turns 100, International Monetary Fund (IMF) executive director Prof KV Subramanian said on Monday.
Subramanian, who was also the 17th chief economic advisor to the Indian govt, said if India maintains an 8% real growth rate, coupled with a 5% inflation rate, the nominal growth rate in Rupee terms would be 13%.
Factoring in an estimated 1% depreciation in the Indian Rupee against the US Dollar, the nominal growth rate in Dollar terms would be approximately 12%, he said. Applying the rule of 72, which states that the number of years required to double a given amount is equal to 72 divided by the growth rate, India’s GDP would double every six years at a 12% growth rate, he said at the unveiling of his book ‘India@100 Envisioning Tomorrow’s Economic Powerhouse’ at the Indian School of Business (ISB) here.
The former CEA pointed out that starting from a GDP of $3.25 trillion in 2023, India’s economy would undergo four doublings over the 24-year period from 2023 to 2047, reaching $52 trillion by the time the country celebrates the 100th anniversary of its independence.
While admitting that this goal may sound audacious, he said it was achievable through the power of compounding and India’s historical growth rate of around 7% over the past 30 years.
Driving home the power of compounding, Prof Subramanian, who is currently on leave from ISB, also pointed to Japan’s economic growth in the 25-year period between 1970 and 1995 with it grew 25 times from $215 billion to over $5 trillion, and per capita GDP grew from $2,100 to nearly $44,000.
Drawing an analogy with Sachin Tendulkar’s cricketing career, he likened India’s economic potential to the legendary batsman’s early days when Sunil Gavaskar predicted his success. However, he stressed that just as Tendulkar had to work hard and overcome setbacks, the Indian govt would have to implement policies and overcome challenges to increase the country’s growth rate from 7% to 8%.
“It’s ambitious but achievable if we double down and work hard and overcome setbacks which will inevitably come during a 20-25 year period. There will be tailwinds but there will be potentially headwinds as well. We can be the Sachin Tendulkar of the global economy,” he said.
Subramanian, who was also the 17th chief economic advisor to the Indian govt, said if India maintains an 8% real growth rate, coupled with a 5% inflation rate, the nominal growth rate in Rupee terms would be 13%.
Factoring in an estimated 1% depreciation in the Indian Rupee against the US Dollar, the nominal growth rate in Dollar terms would be approximately 12%, he said. Applying the rule of 72, which states that the number of years required to double a given amount is equal to 72 divided by the growth rate, India’s GDP would double every six years at a 12% growth rate, he said at the unveiling of his book ‘India@100 Envisioning Tomorrow’s Economic Powerhouse’ at the Indian School of Business (ISB) here.
The former CEA pointed out that starting from a GDP of $3.25 trillion in 2023, India’s economy would undergo four doublings over the 24-year period from 2023 to 2047, reaching $52 trillion by the time the country celebrates the 100th anniversary of its independence.
While admitting that this goal may sound audacious, he said it was achievable through the power of compounding and India’s historical growth rate of around 7% over the past 30 years.
Driving home the power of compounding, Prof Subramanian, who is currently on leave from ISB, also pointed to Japan’s economic growth in the 25-year period between 1970 and 1995 with it grew 25 times from $215 billion to over $5 trillion, and per capita GDP grew from $2,100 to nearly $44,000.
Drawing an analogy with Sachin Tendulkar’s cricketing career, he likened India’s economic potential to the legendary batsman’s early days when Sunil Gavaskar predicted his success. However, he stressed that just as Tendulkar had to work hard and overcome setbacks, the Indian govt would have to implement policies and overcome challenges to increase the country’s growth rate from 7% to 8%.
“It’s ambitious but achievable if we double down and work hard and overcome setbacks which will inevitably come during a 20-25 year period. There will be tailwinds but there will be potentially headwinds as well. We can be the Sachin Tendulkar of the global economy,” he said.
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