Can India become $20 trillion economy by 2036 ? Equirus report say “YES”
India can achieve $ 20 trillion economy by 2023 , according to a report published by domestic brokerage Equirus.
There is however a catch. India needs sustained economic reforms across the key sectors of the economy. This would also need much faster growth in Rupee value of its economy and a stronger currency.
Reports quotes that the reforms could raise India’s rupee growth rate from around current 10.5% to about 14.2% and to reach the target of $ 20 Trillion economy, Rupee needs to appreciate by 3-3.6% every year.
India’ s current GDP is roughly around $ 3.7 trillion GDP and to achieve the $20 trillion target India economy needs to expand approx 5.5x times while yearly growth rate has to be 18% for straight up to 10 years.
“China” Factor behind $20 trillion economy
Equirus report drawing parallel to China, how Beijing achieved milestones by applying measure reforms that help to achieve 18% sustain growth rate for 11 years.
However the Experts say a report comparing India-China skipping the “democracy factor”. India is democratic unlike China.Inroad to reform and major infrastructure development New Delhi faces many hurdles that don’t even concern Beijing.
Here the point is about the technicality. The report argues that China managed a period of exceptional rapid nominal dollar growth rate after opening up and pushing through major economic reforms that provide a useful precedent for India.
Major 20 Reform advocated by Equirus
The report suggested 20 step reforms built around the capital market, service sector, human capital, liveability and governance reform.
Among the key measures are bringing Patrol and diesel in GST, setting state capex floor and ensuring state fully utilise their state capital expenditure budget, monetisation of Railway property, boost to tourism risk and global capability centre, and investment on human capital etc.
The Report analyse that services are expected to do heavy uplifting of the economy. The report expects services to become a major chunk of the Indian economy’s with opportunities ranging from Tech and global capability centre’s to tourism to high value services.
It estimated that simply Narrowing India’s tourism gap with Türkiye could generate an additional $20 billion annually in foreign exchange.
The report further added that more services export means more foreign exchange , more investment can lead to more jobs and more productivity and consumption.
The other suggestion includes creating a sovereign wealth fund, expanding private investment in education, boosting private sector research and deepening the corporate bond market
Reports say the path of a 20 trillion economy doesn’t lie on single reform rather it depends on all reform , it’s property execution and reinforcing each other.
Does it possible to achieve $20 trillion milestone specially on wake of global challenge?
Current global challenges and Rupee depreciating rate makes estimates look too ambitious.
Ongoing Middle East crisis, Ukraine Russia war leading to key supply crisis such as energy and other essentials while major developed countries where India trade in surplus for example U.S.A shifting to inward looking protectionism policy. Tariff war, higher inflation, energy dependence and persistent trade deficit etc. making India becoming a 20 trillion economy by 2023 looks highly aspirational.
Report Invoking China 18 % growth rate ignoring peak globalisation era: open market , globalisation, WTO tailwind, and offshoring instead India navigating to a fragmented world.
Although the $ 20 trillion economy looks too ambitious, if India keeps sustained reform momentum and better execution then growth can accelerate exponentially just like China has done a remarkable job by achieving great milestones .
