India has potential to become $ 55 trillion economy by 2047, says IMF Executive Director Subramanian
Krishnamurthy V Subramanian, Executive Director of the International Monetary Fund (IMF) said on Monday.
In an interactive session during the launch of his book 'India @100' at Indian School of Business (ISB) here, Subramanian said becoming a USD 55 trillion economy by 2074 may appear audacious, but it is achievable. He also said India's private credit to GDP ratio was 58 per cent in 2020, six decades behind the advanced economies which are now at 200 per cent, though there is phenomenal work being done in terms of financial inclusion through schemes like 'Pradhan Mantri Jan-Dhan Yojana'.
«So in other words...while this of course appears to be audacious, it is the power of compounding that makes it happen. As long as we are able to register 8% growth, we can actually become a $55 trillion economy,» the former chief economic advisor said when asked why he thinks India has the potential to be a USD 55 trillion economy by 2047.
Asserting that his assumptions are based on a «rule of 72» which when applied to the 12 per cent dollar rate of growth (8 % GDP growth, 5% inflation-1% Rupee depreciation against dollar), GDP doubles every six years, he explained that over the 24-year period from 2023, the economy which is now at USD 3.25 trillion will have «four doublings» resulting in USD 52 trillion by 2047.
Presenting Japan as an example, Subramanian said its economy grew from USD 215 billion in 1970 to USD 5.1 trillion in 1995, almost a 25x increase in a 25 year period while the GDP per capita grew from USD 2100 to USD
