India on track to become $5 trillion economy by 2027, says RBI Deputy Governor

India will be a $5 trillion economy and the third largest in the world by market exchange rates by 2027, aided by the demographic advantage and pace of financial sector development, Reserve Bank Deputy Governor Michael D Patra has said.

Speaking at the ETCFO Leadership Summit 2023 on Wednesday, Patra said that India’s economic outlook is “bright” and that the country has the potential to grow at a faster rate than the global average in the coming years.

“The IMF’s Regional Economic Outlook for Asia and the Pacific indicates that this region will contribute about two-thirds of global growth in 2023 itself and India will account for a sixth of world output growth in 2023 and 2024,” Patra said.

He added that India’s per capita income, which is currently around $2,500, will rise to $3,500 by 2027, making it a middle-income country.

Patra attributed India’s growth prospects to its favorable demographics, which provide a large and young workforce, as well as its rapid financial sector development, which has enhanced financial inclusion, innovation, and stability.

He also highlighted the role of the government’s reforms and policies in boosting India’s economic resilience and recovery from the Covid-19 pandemic.

“The government has undertaken several structural reforms in areas such as agriculture, labor, education, health, infrastructure, taxation, and corporate law. These reforms are expected to improve the efficiency and productivity of the economy and create a conducive environment for investment and growth,” Patra said.

He also praised the government’s fiscal stimulus measures, which amounted to about 15 percent of GDP, for providing timely and targeted support to various sectors and segments of society.

Patra also lauded the Reserve Bank of India’s (RBI) monetary policy stance, which has been accommodative and flexible in response to the evolving macroeconomic situation.

“The RBI has used various conventional and unconventional tools to ensure adequate liquidity, low-interest rates, smooth functioning of financial markets, and transmission of monetary policy impulses. The RBI has also taken several regulatory and supervisory measures to safeguard the financial system and protect the interests of depositors and borrowers,” Patra said.

Patra acknowledged that there are some challenges and risks facing the Indian economy, such as high inflation, rising crude oil prices, and increased uncertainty due to climate change and geopolitical tensions.

However, he expressed confidence that India has the capacity and capability to overcome these challenges and achieve its growth potential.

“India is on track to become a $5 trillion economy by 2027 and the third largest economy in the world by market exchange rates. This is not a dream or a wishful thinking. This is a reality that is within our reach. We have to work together as a nation to make it happen,” Patra concluded.

This post India on track to become $5 trillion economy by 2027, says RBI Deputy Governor was originally published at Finance Crave