India can aspire to a $7 trillion economy in the next six to seven years (by 2030), asserting that this is a significant milestone towards a quality of life and standard of living that meets and exceeds India's goals surpass the Indian people.
“If the FY25 forecast proves correct, this would be the fourth year post-pandemic in which the Indian economy will have grown at 7% or more. This would be an impressive achievement and a testament to the resilience and potential of the Indian economy. This bodes well for the future,” said V Anantha Nageswaransaid chief economic adviser at the Treasury Department in the review. National Statistical Office (NSO) estimates that the economy will grow by 7.3% in 2023-2024 Reserve Bank of India (RBI) has forecast a growth rate of 7% for the current financial year.
The review said the strength of domestic demand had driven the economy to a growth rate of over 7% over the past three years. The robustness of domestic demand, particularly private consumption and investment, is due to the reforms and policies implemented by the government over the last decade, it said.
“The supply side has also been strengthened through investments in physical and digital infrastructure and measures to boost production. These have collectively provided new impetus to economic activity in the country,” the review said.
“Only the increased risk of geopolitical conflicts is a cause for concern. Priority areas for future reforms include skills, learning outcomes, health, energy security, reducing the compliance burden on MSMEs and gender equality in the world of work,” it said.
It said the reforms undertaken by the Center over the last decade have laid the foundation for a resilient, collaborative governance ecosystem and restored the economy's capacity for healthy growth.
“There are good reasons to believe that India's economic and financial cycles have become longer and stronger. Consequently, India is poised for continued strong growth in the coming years,” the review said.
It identified four risks, including increasing geoeconomic fragmentation and slowing hyperglobalization, which are likely to lead to further friends-shoring and onshoring, which are already impacting global trade and subsequently global growth.
It said the trade-off between energy security and economic growth versus energy transition is a complex issue with different dimensions: geopolitical, technological, fiscal, economic and social, and the policies of individual countries have an impact on other economies.
The review said the adoption of artificial intelligence (AI) represents a major challenge for governments around the world as it raises questions for employment, particularly in the service sector.
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