Goldman Sachs expects India’s economy to grow to $50 trillion by 2075, that is, in a little over 50 years from now. But former chief economic adviser to the Narendra Modi government, Krishnamurthy Subramanian (2018-2021), in a new book, India@100: Envisioning Tomorrow’s Economic Powerhouse, believes that India has the potential to do far better and that it could possibly become even a $55 trillion economy in less than 25 years when India celebrates its 100th Independence day in 2047.
To achieve this feat, it might seem like India, which was a $3.25 trillion economy in 2023, will have to double the size of its economy every 5.6 years, or grow at a mind-boggling 12.5% per year. But the author notes that India may actually need to grow at only around 8% per year in real terms for about 25 years. That’s because if India’s real GDP grows at 8% and the Reserve Bank of India manages to keep inflation around its 4% target against the country’s historical average of 7%, the Indian rupee could depreciate at a far slower pace of around 0.45% per year going forward against the U.S. dollar compared to the 3.5% to 4.5% depreciation witnessed between 1990 and 2020, helping boost India’s GDP in U.S. dollar terms to $55 trillion by 2047. Indian living standards, of course, would be much lower if we grow at 8% rather than at 12.5% in real terms till 2047, but at least technically India would be a $55 trillion economy.
