Indian economy can grow at 8% till 2047, reforms are key: IMF's Subramanian

Subramanian further said that clearly 8% growth target is ambitious, because India has not grown consistently at 8 per cent before, but it is achievable

Indian economy can grow at 8 per cent till 2047, if the country can redouble the good policies that it has implemented over the last 10 years and accelerate reforms, India's executive director at International Monetary Fund (IMF) Krishnamurthy Venkata Subramanian said on Thursday.

Subramanian further said that clearly 8 per cent growth target is ambitious, because India has not grown consistently at 8 per cent before, but it is achievable.

"So, the basic idea is that with the kind of growth that India has registered in the last 10 years, if we can redouble the good policies that we have implemented over the last 10 years and accelerate the reforms, then India can grow at 8 per cent from here on till 2047," he said at the Times Now Summit.

India's economy grew at better-than-expected 8.4 per cent in the final three months of 2023, logging the fastest pace in the past one-and-a-half years.

The growth rate in October-December helped take the estimate for the current fiscal to 7.6 per cent.

"And if India grows at 8 per cent, India can be a USD 55 trillion economy by 20147," Subramanian added.

He pointed out that historically from 1991 onwards, India's average growth has been slightly more than 7 per cent.

Subramanian emphasised that India needs to strengthen its domestic economy as about 58 per cent of the country's GDP comes from domestic consumption.

"Therefore, you know, we do have the potential if we can create enough jobs, you know, that will lead to much higher consumption," he said.

India's IMF executive director stressed on need of encouraging manufacturing sector for job creation.

He also pointed out that reforms are required in land, labour, capital, and logistics sector.

"Reforms are required in the manufacturing sector, but at the same time, we also need reforms in our banking sector to provide credit for manufacturing sector," Subramanian noted.