India's path to 'Viksit Bharat': 8% growth needed for next two decades, says Economic Survey

New Delhi, Jan 31: India must sustain an average growth rate of around 8% for the next decade or two to realize its goal of becoming a "Viksit Bharat" or a developed nation, according to the Economic Survey. This comes at a time when the country’s growth has shown weak performance in the first two quarters of the current financial year.

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India aims to achieve developed nation status by 2047, marking its 100th year of independence. To meet this aspiration, the country needs to maintain a growth rate of about 8% annually, adjusted for constant prices, over the next 10 to 20 years. This target was highlighted in the "State of the Economy" report presented to Parliament by Finance Minister Nirmala Sitharaman.

While the goal of achieving such growth is widely accepted, the report also cautions that global political and economic conditions will have a significant impact on India's growth trajectory.

The International Monetary Fund (IMF) has remained optimistic about India's economic outlook. In its latest projections from October 2024, the IMF forecasts that India will become a USD 5 trillion economy by 2027-28 and grow to USD 6.307 trillion by 2029-30. This reflects an annual nominal growth rate of around 10.2% in USD terms from 2024-25 to 2029-30.

Looking ahead, the Economic Survey emphasizes that enhancing economic freedom for individuals and small businesses is crucial to shaping and strengthening India’s medium-term growth potential.

In terms of recent growth performance, India’s economy expanded by 5.4% in real terms in the July-September quarter of 2024-25, significantly lower than the Reserve Bank of India’s forecast of 7%. Similarly, the April-June quarter showed weaker-than-expected growth. In response, the Reserve Bank of India has lowered its growth forecast for 2024-25 to 6.6%, down from 7.2%. The government, on the other hand, is projecting a 6.4% growth rate.

India’s economy grew by 8.2% in the 2023-24 financial year, maintaining its position as the fastest-growing major economy. In 2022-23 and 2021-22, the economy grew by 7.2% and 8.7%, respectively. For 2025-26, the Economic Survey projects a growth range of 6.3% to 6.8%.

The survey also highlights that the country’s economic fundamentals remain robust, supported by a stable external account, fiscal consolidation, and strong private consumption. The government is focused on long-term industrial growth through initiatives in research and development (R&D), micro, small, and medium enterprises (MSMEs), and capital goods. These efforts aim to enhance productivity, foster innovation, and improve global competitiveness.

(With agency inputs)