Bolstered by India toppling France to become the sixth-largest economy, Union Finance Minister Arun Jaitley said the country is likely to become the fifth-largest economy ahead of the UK next year if the projected growth rates are achieved.
The government has estimated the economy to grow between 7-7.5 per cent in 2018-19, against 6.7 per cent in the previous fiscal year.
“If we keep growing at the rate that is being projected, it is likely that we will be the fifth-largest economy next year, ahead of Great Britain,” he wrote on his Facebook page.
According to World Bank data, India had a GDP of $2.59 trillion in 2017, higher than France's $2.58 trillion. Britain's was just about $25 billion higher than India at $2.62 trillion.
However, there was a significant gap between the top four economies of the world, and India.
In 2017, the US was the world's largest economy, with a size of $19.39 trillion, followed by China ($12.23 trillion) in second place. Japan ($4.87 trillion) and Germany ($3.67 trillion) are third and fourth, respectively. Jaitley said the likelihood of India becoming the fifth-largest economy next year is in consonance with the rest of the narrative.
“Being the fastest growing economy for the last four years, we can look at the next decade as one of economic expansion. We have already seen a significant move up in India’s ranking in the ease of doing business and as a preferred investment destination,” he said. Obviously, he said, India has started witnessing many of the advantages of a fast growing economy.
“More consumption, more production, more industries, an expanding service sector, greater urbanisation, many more jobs, more economic activity, and certainly more revenue,” he said. India, he said, stands to be tested in the midst of a global challenge thrown up on account of international crude oil prices and an impending trade war.
However, he sounded a word of caution that there would be a very significant difference in the per capital of India and France, due to disparity in the size of the two countries.
Differentiating between the economic management of the central government and the previous Congress governments, he said that ever since Prime Minister Narendra Modi took over, the government’s own yardstick for performance had become stiffer.
He said the challenges were—how quickly are we able to deplete the poverty levels of a section of our people; how are we able to translate the advantages of faster growth to rural India, which has always been less advantaged; how are we able to bring a significant section of people into the neo-middle class so that their aspirations can also be met with.
He said the Congress provided India’s poor with a slogan. Prime Minister Modi has given them resources. This will ensure faster growth and lead to a faster depletion in the poverty.