Indian PM Narendra Modi, confident of winning a national election starting this month, has decided to set an ambitious target of roughly doubling the economy and exports this decade, according to a government document seen by Reuters. Modi has highlighted economic growth as one of his biggest achievements in election rallies and has guaranteed to make the economy the third largest in the world from fifth now if he wins a third term in a row as polls have predicted.
He has already asked officials to finalize plans by May to expand the economy to $6.69 trillion in nominal terms by 2030, from around $3.51 trillion currently, according to an October document. Although short on concrete details of how to achieve that, it has been a basis for official meetings.
When he took the office for a second term five years ago, Modi promised to take the economy to $5 trillion by the current fiscal year, but due to COVID-19 restrictions, meeting that target is essentially impossible now for next year’s Modi’s goal is to raise per capita income to $4,418 from around $2,500, according to documents without specifying the reforms, or spending required to achieve that.
Independent economist Saugata Bhattacharya stated that doubling the economy by the end of the decade will be an incredibly difficult feat, which requires 6%-6.5% growth for the next seven years alongside an inflation of 4.5%. The economy is, however, expected to have grown by 8% in the last fiscal year, which ended March 31. It is the fastest among major countries on the back of strong manufacturing and construction activity driven by government spending. A former senior finance minister official, Subhash Chandra Garg, said that growth projections like the ones in documents are mostly based on backward arithmetical calculations and lack any kind of reform or investment plan.
Garg added “Usually such mental gymnastics based on arithmetic calculations and assumptions are meaningless unless there is serious reform and investment plan to test it for real economy dynamics,”
