By Prarthana Mitra
Having recorded a Gross Domestic Product (GDP) of $2.6 trillion for 2017, India became the worlds sixth largest economy, according to the database of the International Monetary Funds World Economic Outlook (WEO) released in April 2018.
This is the first time India crossed the $2.5 trillion yardstick used to distinguish between the big economies and the rest of the world.
Here’s what happened
India displaced France from the sixth position to follow United States, China, Japan, Germany and United Kingdom in the list, just one position short of joining the big five currently dominating the global economy.
The report concluded that the Indian economy has not only recovered but has enabled South Asia to become the world’s fastest-growing region, for the second time in a row. The Fund acknowledged India’s spectacular turnaround but kept its growth forecast unchanged to 7.4% for 2018, up from 6.7% in 2017. The World Bank projected a growth of 7.3% for 2018 which would stabilise at 7.5% in 2019 and 2020.
India’s GDP growth rates as compared to the United States, and other groups of countries. Credit: IMFThe IMF-World Bank meetings have also yielded in a lot of prescriptions for Indian commerce, business affairs and finance ministries, to address the dire need for more progressive labour, local industry and land acquisition laws, including a focus on job creation.
Why you should care
This is a landmark development for India, said an official from the finance ministry in an interview with the Hindustan Times. Drawing attention to the symbolic and far-reaching implications of this news, the official added that numbers matter and “work to shape opinion, and more importantly … influence investment decisions.”
Indian economy at a glance as per the IMF. Credit: IMFIndia has also regained its title as the worlds fastest-growing major economy owing to a slew of economic policies launched by Prime Minister Narendra Modi over the past few years. The NDA government has always prioritised economy ever since it came to power, including its renewed emphasis on export, bilateral trade relations and local manufacturing, which continue to be the lifeblood for our country’s economy.
Both the World Bank and IMF have applauded India’s economic policies for overcoming the recent adversities like corporate debt and economically disruptive forces like financial scams. “While the medium-term growth outlook for India is strong, an important challenge is to enhance inclusiveness,” said the IMF.