India could become 3rd largest economy globally by 2027-28: Arvind Panagariya

18 May 2024 Evaluate

Expressing optimism over India’s growth prospects, 16th Finance Commission Chairman Arvind Panagariya has said that the country could become the third largest economy globally by 2027-28 if the country continues the growth momentum witnessed in the last two decades. He also said that during the last two decades, beginning 2003-4, India has ended extreme poverty. The extreme poverty, currently, is not more than 3 percent of the total population.

He said there is a problem of under-employment in the agriculture sector as a large portion of the workforce is engaged in the segment, and there is a need to move them out of the vertical to industry for faster urbanisation. He said ‘A large part of the workforce in agriculture has to move to industrial or services economy, and that is the pathway to transformation’. Currently, 45 percent of India's workforce is employed in agriculture and the sector contributes 15 percent of GDP. This means the average productivity in agriculture is one-third the average productivity in the economy.

About growth, Panagariya said in the last two decades, starting 2003-04, India has grown at about 8 percent in real GDP in US dollar terms. In nominal terms, the GDP growth has been 10.2 percent in the past 20 years. He said ‘A lot of what we have today has transpired in the last two decades. During this period, we dealt with the global financial crisis and COVID shocks. It is that growth, which has put us in the fifth spot in international GDP ranking in dollar terms’. India, with a GDP of roughly $3.4 trillion, is currently the fifth largest economy in the world, after the US, China, Germany and Japan.