At 7%, economy may double in 10 yrs: ADB

At 7%, economy may double in 10 yrs: ADB

India’s projected GDP growth of over 7% for the current fiscal is “amazingly fast”, and if this momentum is maintained, the size of the economy can double within a decade, ADB Chief Economist Yasuyuki Sawada has said.

The country should not worry about not achieving 8% growth but focus on increasing domestic demand by reducing the income inequality, Sawada said.

Growth is driven more by domestic consumption than exports, he added.

The Asian Development Bank (ADB) has projected India to remain the fastest growing Asian nation with 7.3% growth in 2018-19, and 7.6% in 2019-20.

The Indian economy is forecast to grow at 6.6% in the 2017-18 fiscal ended March 31, slower than 7.1% in 2016-17.

“7% growth is amazingly fast. If a 7% growth continues for 10 years, then that economy’s size doubles,” Sawada said.

“So that’s a super fast growing growth rate. And being one of the largest economies in the region, achieving this 7.3% this fiscal and next year, 7.6%, is really amazing,” he added.

The size of India’s economy is about $2.5 trillion currently, making it the sixth largest in the world. Economic Affairs Secretary Subhash Chandra Garg had said recently that the country is on track to doubling the size of its economy to $5 trillion by 2025.

Sawada, however, said that clocking 8% growth is a “big challenge” for India as of now. “7% growth is a very good number and India should not worry about not achieving 8 per cent growth,” he said.

Asked whether export revival would be important for driving the economic growth, he said that half of India’s growth is driven by private consumption followed by investment and hence domestic market seems to play a major role in growth.