After Prime Minister Narendra Modi said in his Independence Day speech that India was aiming to reach the position of the world's third-largest economy due to enormous reforms in progress across several sectors, Dr. Gita Gopinath, Deputy Managing Director of the International Monetary Fund (IMF), has come forward to say that this milestone will be attained by 2027.
It is projected that by the end of the decade, India will have assumed its place as the fifth-largest economy in the world and be well on its path to taking a place in the top three global economic powers.
According to Dr. Gopinath, India outperformed and defied most of the gloomy predictions for the last fiscal year, FY24, mainly due to a resurgence in private consumption, more so in the rural economy. That was quite visible in the kind of sales recovery almost every sector saw, from two-wheelers to fast-moving consumer goods (FMCGs), which pointed to general increases in consumption. She added, "With better monsoons come better harvests and agricultural incomes go up," as reported by several media.
Recent data from the Society of Indian Automobile Manufacturers pegged passenger vehicle production at 24,37,138 units in July, which includes three-wheelers, two-wheelers, and quadricycles. The two-wheeler segment grew by percent over the year.
The resilience is on view in the fast-moving consumer goods sector in India too. For instance, market research firm Kantar Worldpanel expects the FMCG market to grow annually at a pace of 6.1% in fast-erstwhile laggard rural markets in FY 2024-25, from 4.4% last year.
The report also indicated that soon the rural market volumes would be at par with those of urban areas, where they were currently higher. The rural FMCG market has assumed larger importance-almost half of the segment's volume and value.
Dr. Gopinath also said that India would need the generation of millions of new jobs in the coming 5-6 years.
The IMF has projected a GDP growth for India for FY25 at 7 percent, revising the same from 6.8 percent made in April. On the same lines, Shaktikanta Das, Governor of the Reserve Bank of India, said the average growth of India over the last three years has been 8.3 percent, while that for the current year is.
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