India’s economy could reach $55 trillion by 2047 if it sustains an 8% annual growth rate, a goal that is ambitious yet achievable, according to IMF executive director Krishnamurthy V Subramanian.
At a recent media event, Subramanian highlighted India’s favorable demographics and government policies that have boosted growth, such as public digital infrastructure and a surge in entrepreneurship since 2014. He noted that India now has the world’s third-largest entrepreneurial ecosystem, driving productivity in the formal sector.
He emphasized the rapid formalization of the economy as a key driver of productivity, given that a significant portion of India’s economy is still informal, where firms are less productive.
Addressing concerns about the World Bank’s prediction that India may take 75 years to reach one-fourth of the US’s per capita income, Subramanian stressed that manufacturing growth is crucial for avoiding the middle-income trap. He also advocated for a sunset clause on industry subsidies.
The IMF recently revised India’s GDP growth forecast for 2024-25 to 7%, up from 6.8%, citing improved private consumption, particularly in rural areas.
