India will this year overtake the UK to become the world’s fifth biggest economy, and is poised to surpass Japan to be the third largest in 2025, IHS Markit said in a report Friday.Following the re-election of the BJP government led by Prime Minister Narendra Modi to a second term of office in May 2019, the Finance Ministry has published an economic roadmap to 2025 in its latest annual Economic Survey.
The key goal is to transform India from a USD 3 trillion economy in 2019 to a USD 5 trillion economy by 2025, lifting India into the ranks of the world’s upper-middle-income countries, it said.’IHS Markit estimates that India will overtake the UK to become the world’s fifth largest economy in 2019, and forecasts that Indian GDP will reach USD 5.9 trillion in 2025, surpassing Japanese GDP to make India the world’s third-largest economy,’ the report said.
The size of the Indian consumer market is forecast to increase from USD 1.9 trillion in 2019 to USD 3.6 trillion by 2025.
‘As India continues to ascend in the rankings of the world’s largest economies, its contribution to global GDP growth momentum will also increase. As the size of its consumer market continues to grow at a rapid pace, India will also play an increasingly important role as one of the Asia-Pacific region’s major economic growth engines, helping to drive Asian regional trade and investment flows,’ IHS said.
But to achieve this, the country’s new economic roadmap highlights the importance of creating a virtuous cycle of investment, savings and exports in order to sustain rapid economic growth over the next five years.
The role of investment is seen as a critical enabler for innovation, rapid productivity growth and new technology, helping to boost jobs growth. The roadmap described in the latest Economic Survey highlights the importance of creating a favourable ecosystem for private investment, particularly in the new economy.
IHS said accelerating the development of new economy startups and growing new unicorns is a critical strategy for creating value-added and skilled jobs growth.
‘Despite significant achievements in new infrastructure construction during PM Modi’s first term, rapid infrastructure development in key sectors such as transport and power infrastructure remain important priorities, as well as reducing the regulatory burden of government red tape,’ it said.India was ranked 77 out of 190 countries that are included on the World Bank’s Ease of Doing Business Index for 2019.
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