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Published: Mar 25, 2023
Updated: Mar 25, 2023

India aims to become $5tn economy before IMF's projection

Government aims to make India a $5 trillion economy ahead of IMF forecast

The Indian government is taking steps to achieve its goal of making India a $5tn economy sooner than the International Monetary Fund's forecast of 2026-27, according to Minister of State for Finance Pankaj Chaudhary. He cited the Covid-19 pandemic and the Russia- Ukraine conflict as factors that have impacted global output, increased inflation in several countries, and raised uncertainty in the world economy, but said that a more stable global economic outlook would help India reach its goal earlier.

Government taking measures to boost economic growth and GDP

Measures taken by the Indian government to boost economic growth include the National Infrastructure Pipeline of projects, capital expenditure push, Production Linked Incentive scheme implementation, National Monetisation Pipeline of public sector assets finalisation, and the National Logistics Policy formulation.

PM Gatishakti to speed up capital expenditure and infrastructure planning

Capital expenditure will be accelerated by PM Gatishakti, which will coordinate infrastructure planning and project implementation across all relevant central ministries, departments, and state governments. The Union Budget 2023-24 also sustains growth momentum by increasing capital investment outlay for the third year in a row, by 33% to Rs10tn ($133bn), or 3.3% of GDP.

Other initiatives to boost the economy include enhanced outlay for PM Awas Yojana, the Aspirational Blocks Programme, an increased agriculture credit target to Rs20tn ($266bn), and the creation of an Agriculture Accelerator Fund to encourage rural agri-startups by young entrepreneurs, among others.

Union Budget 2023-24 sustains growth momentum with increased capital investment outlay

The direct capital investment by the Centre is being complemented by the provision made for the creation of capital assets through grants-in-aid to states. The 'effective capital expenditure' of the Centre is budgeted at Rs13.7tn ($183bn), or 4.5% of GDP, for 2023-24. The newly established Infrastructure Finance Secretariat will oversee the increase in private investment in infrastructure.

Critical transport infrastructure projects identified for development

To improve logistics performance, 100 critical transport infrastructure projects for last and first-mile connectivity for ports, coal, steel, fertiliser, and food grains sectors have been identified and will be prioritised for development.

Accordingly, the government is taking significant steps to make India a $5 trillion economy at an early date, ahead of the International Monetary Fund's forecast. These efforts include measures to reduce uncertainty in the global economic outlook, past government initiatives to boost economic growth, and the launch of PM Gatishakti to speed up capital expenditure and infrastructure planning. The Union Budget 2023-24 sustains growth momentum with increased capital investment outlay, and other initiatives are underway to enhance the economy. With direct capital investment by the Centre complemented by grants-in-aid to states and the oversight of the Infrastructure Finance Secretariat, India is poised for growth in critical transport infrastructure projects for development.