According to a report complied by Centre for Economics and Business Research, Indian economy will reach at 5th position by 2020 surpassing UK, Germany and France. Currently, India stands at the 10th position and would reach 5th position by 2020.
According to the World Bank data, India was on 9th position compared to US and other major economically progress countries with the figure of $173 trillion which was based on the GDP growth. Apart from India, World Bank said?in its latest World Economic League Table?that US is the world?s largest economic country with $14.6 trillion till the end of 2010, followed by China, Japan, Germany and UK.
The report also added that Brazil has also become the world?s 6th largest country pushing the UK to 7th position. It further mentioned that Britain would continue to lose its positions but would score better than France.
?I thinks it?s a part of big economy change, where we are not only seeing a shift from West to East, but we are also seeing that countries which produce vital commodities like food and energy are doing very well and are gradually climbing to the economic league table.?
There is tough war between India and other countries, especially with Brazil which is also being predicted to reach the 5th position in economic league table.
CONTRIBUTION TO INDIA’S ECONOMIC GROWTH
There has been a relative shift in the engine which drives the development of a country like India. From manufacturing to service sector and from capital to knowledge resource, there has been a tremendous growth in the recent years.
Information technology, education, organisation and production area will play a pivotal role in the upbringing of India?s economy by 2020. This would also help in reaching the targeted GDP growth of 8.5 to 9 percent in the next 20 years and would also eliminate the percentage of Indian population living under the poverty line.
According to the reports, rate of investment, better infrastructure and consumer expenditure will be a driving force for the rising economic position of India. Besides these, the share of services sector is also going to rise up from 57.3 percent in 2010 to 61.8 in 2011, which is a positive sign.
According to the Planning Commission report, India and its people will see a new dimension in part of education, lifestyle and health by 2020. The rising productivity and rapid diversification could spur Green Revolution in the agricultural sector, which would help in meeting food demand for the growing population.
There also will be a great contribution from BIMAROU states (Bihar, Madhya Pradesh, Rajasthan, Orissa and Uttar Pradesh) registering a share of 24 per cent of the GDP by 2020.
?At the policy end, direct cash subsidy, NREGA, UID, environment and national manufacturing policies, FDI in some sector would also be playing a pivotal role in increasing economy of India,??Arun Singh, senior economist at Dun & Bradstreet India said.
To reach in the top 5 position of world economy, India has to face some major challenges that are still pertaining in Indian states. Boosting agricultural output and developing better food supply chain is the initial challenges which Indian policymakers have to face.
Another major challenge is to restructure country?s physical infrastructure which fails to contribute to the Indian economy. To overcome the infrastructure problem, involvement of private sector is very essential.
Proper allocation of public finance is also a major challenge which policymakers have to face. Indian financial intermediaries are using 70 per cent of net savings to finance public sector. These savings come from households and investors. A better roadmap for the allocation of finance would really help in country?s economy growth.
Whether India will reach its assumed economic growth position depends on the proper restructuring of financial sector and government policies that would also help the economy faces local and global challenges.
Sources: Economic Times, Planning Commission, Rabobank