Target of $5 trillion economy is statement of intent: NITI Aayog official

The government's target of achieving a $ 5 trillion economy by 2024-25 is a statement of intent, which sounds idealistic, a Niti Aayog official has said, asserting that "tough times" don't last as she dispelled concerns over economic slowdown.

Addressing a session organised by the Merchant Chamber of Commerce and Industry (MCCI) here on Monday, Chairperson of the National Committee on Financial Inclusion and Literacy - Niti Aayog Bindu Dalmia said the target has been so set to raise the bar of India's economic performance.

"For now, the ambitious $ 5 trillion economy target is a statement of intent, which sounds too idealistic," she said, adding that the country is well on the path to achieving it.

Dispelling concerns over the slowdown, Dalmia said that tough times don't last but tough nations do.

"There is no reason for irrational pessimism. Going forward, there is every reason for future optimism, as economic green shoots are beginning to appear, as gauged through various economic indicators like higher employee provident fund registrations, an uptick in retail lending, rise in MUDRA loans and rise in bookings in residential real estate, among others," Dalmia said.

India is "trapped" within a range-bound GDP growth of 5-6 per cent, she said.

"We have two avenues of growth -- the opportunity within the current situation and the opportunities despite the current situation," she said.

"Global MNCs are looking for a 'China +1' alternative for a manufacturing hub. This puts India in a sweet spot to become a beneficiary of relocation for setting up complete manufacturing units. The opportunity despite the current situation is that Digital India is the next engine of growth," she said.

In January, Prime Minister Narendra Modi had met economists, private equity and venture capitalists, business leaders and agri experts at NITI Aayog, and called for focused efforts to achieve the target of making India a $ 5 trillion economy.

The Niti Aayog official said government spending has to be stepped up in the "absence" of the private sector participation.

Dalmia said there has to be a reduction on the dependency on agriculture to decrease poverty levels.

Agriculture can only sustain the growth of 3 per cent per annum, "while we need growth of 10 per cent" to lift people out of poverty, she said.

She said India is on the cusp of the fourth industrial revolution, which will be "disruptive and holds the greatest potential as also peril" to transform entire systems and business models.

Dalmia also batted for a separate development financial institution (DFI) to boost lending for long- gestation infrastructure projects.