India to become $5 trillion economy by 2025, says Garg; these reforms will support

The secretary of Department of Economic Affairs Subhash Chandra Garg believes that India continues to be a beacon of growth in the region, and has the potential to become a $5 trillion economy by 2025 by leveraging on digitization, globalization, favorable demographics, and structural reforms. In the third quarter of FY18, India’s Gross Domestic Product (GDP) earmarked the over 7%-mark after travelling to a three-year low in the fiscal. Considering the performance, analysts are very optimistic on Indian economy for fiscal year 2018-19. Garg who is also an alternate governor of the World Bank and IMF laid out factors that will support India to $5 trillion economy level in the 97th Meeting of the Development Committee held yesterday in Washington DC, USA.

Garg says, “In the last few years, India has undertaken massive structural reforms towards formalization of the economy and fostering digital financial inclusion.”

As per Garg, transformational reforms such as Goods and Services Tax (GST), and initiatives such as Insolvency and Bankruptcy code, recapitalization of banks, and debottlenecking infrastructure investments, will support such elevated growth.

Here’s a list of few pointers that Garg made in regards to India during the meet.

India has accorded great priority to addressing its infrastructure deficit to sustain economic growth. Further India has begun undertaking a major programme of monetizing Brownfield Assets of Central Public Sector Undertakings (CPSUs)as a separate asset class for infrastructure investments.

In the field of digitization, India has completed the ambitious task of connecting one hundred thousand gram panchayats through high speed optical fiber network under phase I of the BharatNet project. This has enabled broadband access to over 200 million rural Indians in about two hundred and fifty thousand villages.

To further strengthen digitalisation, Garg stated that, the Government also proposes to setup five hundred thousand wi-fi hotspots which will provide broadband access to fifty million rural citizens.

One of the key features of India’s economic performance in recent years has been the speed and scale of implementation. Recent upgrade of the sovereign rating reflects India’s strength, speed and scale of these ongoing reforms.

Within a short span of eight months, the monthly earnings from GST have crossed the $12.7 billion mark. Number of dealers registered in GST increased by about 4 million in the fiscal year of rollout which is about 60% higher than unique assesses registered earlier in the VAT network in the country.

India’s massive leap in the Ease of Doing Business rankings from 142 in 2014 to 100 in 2017 is testimony to India’s commitment to long-term reforms for an open and vibrant economy. This is also reflected in strong FDI inflows which have grown from $34.3 billion in 2012-13 to $60.1 billion in 2016-17.

The Jan-DhanYojana, launched in August, 2014, has rapidly expanded banking services for the hitherto deprived sections. Till date, over313 million bank accounts have been opened and savings of about $11.510 billion has been mobilized under the scheme.

India rapidly rolled out the Mudra Yojana in April 2015 and has supported over 115 million small businesses by sanctioning loans of $77.66 billion so far.

India aims to achieve about 40 percent cumulative installed power capacity from non-fossil fuel based energy resources by 2030 with the help of transfer of technology and low cost international finance.

India is committed towards ensuring affordable housing for all. For this purpose, Prime Minister Awas Yojana has been launched in rural and urban areas of the country. Under this programme, 5.1 million houses each will be constructed in 2017-18 and in 2018-19 exclusively in rural areas.

India has launched Prime Minister Saubhagya Yojana for providing electricity to all households of the country. Under sanitation, we have launched the Swachh Bharat Mission, under which more than 60 million toilets have been constructed.