How India, the 'bright spot', can continue to shine

Over the past 25 years, India has risen up the pecking order to become the world's fastest growing major economy. The third part of the series looks at the areas it needs to focus on to realise its $5 trillion ambition and be counted among the top three economies

- Ruchika Chitravanshi

In 2000, India's gross domestic product (GDP) stood at around $468 billion. It would cross the $1 trillion mark only seven years later (in 2007), and it would be another seven years before it hit $2 trillion. Fast forward to 2024.

India is now the world's fifth-largest economy, with a GDP of $3.6 trillion. And, it aspires to become the third-largest economy, with a GDP of $5 trillion by 2027-2028 (FY28).

India's 25-year journey, marked by landmark reforms such as the Insolvency and Bankruptcy Code, and the goods and services tax, and its resilience amidst the global financial crisis and the Covid pandemic, has placed the country among the world's fastest growing economies. Over these years, it has become a leading example of financial inclusion, propelled by the digitalisation of its economy. The UPI, for instance, has been a game changer, leading to what the G20 sherpa, Amitabh Kant, described as a "pole vault" in digital public infrastructure.

Reaching this point was no easy feat, and the journey wasn't always smooth.

Over this 25-year period, India faced the global financial crisis in 2008, followed by an audacious terror attack on its financial capital later that year. And then in 2016, about 86 per cent of the country's currency was demonetised - declared null and void overnight.

Despite these hurdles, there have been significant gains. The world is now looking at India with growing interest. The International Monetary Fund called it a bright spot in an otherwise gloomy global economy. However, if India is to maintain this momentum and achieve its goal of becoming a developed nation, much more needs to be done. Economists say that sustained GDP growth of 7 per cent or more is essential.

At a recent summit, Chief Economic Advisor V Anantha Nageswaran said India must leverage all domestic growth drivers, especially as the global environment is far from conducive.