5 Trillion USD GDP Target Simply out of Question: Rangarajan
Former RBI Governor C Rangarajan has raised doubts over India reaching that target of 5 USD Trillion Target
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Stating that the economy is in bad shape on Thursday, 21 November, former Reserve Bank Governor, C Rangarajan, has said at the current growth rate reaching the USD 5-trillion GDP target by 2025 is "simply out of question".
Modi government soon after assuming office for the second term has set a target of taking the economy to Five USD trillion over the next five years. But since there have been dark clouds gathering all over the economy leading many to question the maintainability of the target.
The economy has been on steady decline with growth rate slowing from 8.2 percent in FY16 to 6.8 percent in FY19.
While the first quarter growth slipped to a six-year low of 5 percent, the best forecast for the second quarter is 4.3 percent now. Even the RBI has lowered its growth full year forecast by a full 90 bps in two months to 6.1 percent in its October policy review.
"You have lost two years. This year it is going to be under-6 percent growth and next year it may be about 7 percent. Thereafter the economy may pick up," he said while addressing a function organised by IBS-ICFAI Business School.
He also if at all the GDP becomes a USD 5-trillion gorilla, our per capita income will grow still USD 3,600 up from the present USD 1,800, leaving us still in the low-middle income country bracket.
"The definition of a developed country is the one whose per capita income is USD 12,000. It will take 22 years for us to reach that level provided we grow at 9 percent per annum," the former central banker said.
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