Former Reserve Bank Governor C Rangarajan has said that India becoming a $5 trillion economy by 2025 is impossible under the current circumstance. He said ‘India’s economy was $2.7 trillion strong in 2019. At the end of March 22, we will still be at the same level.’ To go from $2.7 trillion to $5 trillion, he said the country needs to grow at 9 percent per annum for the next five years.
Rangarajan said attempts should be made to curb the adverse impact of a third wave of COVID-19, if it happens and both the coverage of vaccination and the pace of investment in health infrastructure should be accelerated within the strategy of expanding the overall infrastructure investment. He also has stated that in order to achieve the $5 trillion economy, growth which is the answer to many of socioeconomic problems, should therefore become the undivided concern of the government and equity which is equally important will be a distant dream unless it is supported by high growth spurred by reforms.
As revenues improve, Former Reserve Bank Governor opined that expenditures can be increased even as there is no need to reduce the fiscal deficit below the budgeted level of 6.8 per cent of GDP and fiscal consolidation may start from the next financial year. He further said India indeed needs a faster rate of growth to make up for the loss of output in the previous two years from the trend rate and must lay the foundation for a faster growth in this year itself.
