India is assured to remain the fastest growing large economy in the world with economic reforms adopted in the last few years starting to bear fruit. India’s GDP is expected to reach $5 trillion by 2025, economic affairs secretary Subhash Chandra Garg has told the World Bank.
Garg is leading the Indian delegation for the annual Spring Meeting of the International Monetary Fund and the World Bank in absence of the Union finance minister Arun Jaitley.
“India is poised to remain as the fastest growing large economy in the world. In 2018, we expect India to grow at over 7.4%,” economic affairs secretary Subhash Chandra Garg told the 97th meeting of the Development Committee of the World Bank in Washington on Saturday.
He added, “In the last few years, India has undertaken massive structural reforms toward formalisation of the economy and fostering digital financial inclusion.”
India had grown at an average of 7.2% p.a in the last four years and was continuing on the trajectory of sustained growth.
“India’s GDP is expected to reach a volume of $5 trillion by FY2025 by leveraging on digitisation, globalisation, favourable demographics and structural reforms,” Garg added.
Transformational reforms such as Goods and Services Tax (GST), and initiatives such as Insolvency and Bankruptcy code, recapitalisation of banks, and unclogging of infrastructure investments will support such elevated growth, he told the World Bank.
India, he said, has accorded top priority to addressing its infrastructure deficit to sustain economic growth. Steps have been taken to mobilise funds from various sources for development of infrastructure which includes, inter alia, launching of innovative financial vehicles, he added.
India has begun undertaking a major programme of monetising brown field assets of Central Public Sector Undertakings (CPSUs) as a separate asset class for infrastructure investments, Garg said.
“In the field of digitisation, India has completed the ambitious task of connecting 100,000 gram panchayats through high speed optical fibre network under phase-I of the Bharat Net project,” he said, adding that it has enabled broadband access to over 200 million Indians living in about 250,000 villages.
The government also proposes to setup 500,000 wi-fi hotspots which will provide broadband access to 50 million rural citizens, Garg said.
Around 470 Agricultural Produce Market Committees (APMCs) have been connected to the electronic National Agriculture Market (e-NAM) network providing a unified national market for agricultural commodities, he added.
“Recent upgrade of the sovereign rating reflects India’s strength, speed and scale of these ongoing reforms, within a short span of eight months, monthly earnings from GST have crossed $12.7 billion.” he said.
The number of dealers registered in the GST database increased by about four million in the fiscal year of the roll-out 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, he added.
In the arena of financial inclusion, the Jan-Dhan Yojana, launched in August, 2014, has rapidly expanded banking services for the hitherto deprived sections, he said.
Till date, over 313 million bank accounts have been opened and savings of about $11.510 billion has been mobilised under the scheme, Garg said.
For providing access to financial facilities by small businesses, India rolled out the Mudra Yojana in April 2015 and had supported over 115 million small businesses by sanctioning loans of $77.66 billion so far, he claimed.
Garg said the country aimed to achieve about 40% 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.