Prime Minister Narendra Modi on Thursday said the government would spend Rs 100 lakh crore on developing modern infrastructure that will help in nearly doubling the size of the Indian economy to $5 trillion in the next five years.
Addressing the nation from the ramparts of the Red Fort in Delhi on the 73rd Independence Day, Modi said, "The target of nearly doubling the size of Indian economy to $5 trillion in five years may seem difficult. But when we have in five years (of BJP rule) added $1 trillion as compared to $2 trillion size achieved in 70 years of independence, then this target is achievable."
The government will continue reforms to help India break into top 50 countries on the 'ease of doing business' ranking, Modi said.
Recently, multinational professional services firm EY said the Indian economy would need to grow by 9 per cent every year for five years continuously and raise aggregate investment rate to 38 per cent of GDP to achieve Prime Minister Narendra Modi's target of turning India into a $5 trillion economy. In its latest edition of Economy Watch, EY said assuming India grows by projected 7 per cent in the current fiscal year ending March 31, 2020, the size of the economy will grow to $3 trillion from $2.7 trillion in the previous year.
The economy will have to grow by 9 per cent in each of the five subsequent years to take the size of the economy to $3.3 trillion in FY21, $3.6 trillion in FY22, $4.1 trillion in FY23, $4.5 trillion in FY24 and $5 trillion in FY25.
"Assuming an inflation rate of 4 per cent which is the target inflation rate as per the Monetary Policy Framework, a real growth rate close to 9 per cent would be required to increase the size of the Indian economy to USD 5 trillion by FY25. This implies a nominal growth rate of 13 per cent, assuming an average annual depreciation of the rupee viz-a-vis the US$ at 2 per cent," EY said.
Edited by Aseem Thapliyal