Visual Insights: India’s Journey to Becoming the Fourth Largest Economy Globally
India is poised to become the world’s fourth-largest economy by the end of 2025, as projected by the International Monetary Fund (IMF) in its World Economic Outlook report. This significant milestone comes as India surpasses Japan, following its rise from the tenth position in 2014 to the fourth in just over a decade. With a projected GDP growth rate of 6.2% for 2025, India is set to maintain its status as the fastest-growing major economy, despite global economic uncertainties.
India’s Economic Ascendancy
India’s economic journey has been remarkable, with its nominal GDP expected to exceed $4 trillion by 2025. This growth represents a staggering increase of 105% since 2014. The IMF’s report highlights that India will rank behind only the United States, China, and Germany in nominal GDP terms. The country’s ascent from the tenth largest economy to the fourth largest in just 11 years underscores the effectiveness of various economic reforms implemented under the current government.
The growth trajectory has been supported by a series of structural reforms, including the introduction of the Goods and Services Tax (GST) and the Insolvency and Bankruptcy Code. These reforms have not only stabilized the economy but have also enhanced the health of the banking sector. Additionally, investments in infrastructure and a push for digitalization have played crucial roles in sustaining this economic momentum. Experts note that India’s average annual growth rate of 6.7% from 1990 to 2023 has outpaced that of major economies like the United States and Germany.
Challenges Ahead: Per Capita GDP Concerns
Despite the impressive growth figures, India’s per capita GDP remains a point of concern. With a population exceeding 1.4 billion, the benefits of economic growth are diluted, resulting in India not ranking among the top 100 countries for GDP per capita. The informal employment sector, which comprises approximately 90% of the workforce, coupled with low female workforce participation, further complicates the situation.
While per capita income has nearly doubled over the past decade, disparities persist across regions, influenced by varying population growth rates and economic development speeds. Experts emphasize that addressing these challenges is crucial for ensuring that economic growth translates into improved living standards for all citizens.
The Path to a $5 Trillion Economy
Looking ahead, India aims to achieve the ambitious goal of becoming a $5 trillion economy by 2027 and the world’s third-largest economy by 2028. To realize this vision, continuous reforms are essential. Experts advocate for measures that facilitate private enterprise and reduce regulatory burdens. Progressive labor reforms and significant investments in education and skill development are also seen as vital for enhancing employability among the youth.
Moreover, boosting exports through improved infrastructure and quality outputs from micro, small, and medium enterprises (MSMEs) is crucial for sustaining economic growth. As India navigates these challenges, maintaining a stable political environment and fostering investor confidence will be key to ensuring that the benefits of economic growth reach all segments of society.
Observer Voice is the one stop site for National, International news, Sports, Editorโs Choice, Art/culture contents, Quotes and much more. We also cover historical contents. Historical contents includes World History, Indian History, and what happened today. The website also covers Entertainment across the India and World.
