Economic Survey 2024-25: India needs to grow at 8% to become 'Viksit Bharat' by 2047

To realise India’s economic aspirations of becoming Viksit Bharat (developed nation) by 2047, the time of the centenary of independence, the country needs to achieve a growth rate of around 8% at constant prices, on average, for about a decade or two, according to the Economic Survey 2024-25 tabled by Finance Minister Nirmala Sitharaman in the Parliament.

“While the desirability of this growth rate is unquestionable, it's important to recognise that the global environment – political and economic – will influence India's growth outcomes,” the survey notes.

“The projections for India from the lens of the World Economic Outlook (WEO) of the International Monetary Fund as recently as October of FY25 are sanguine. The IMF WEO projects India to become a $5 trillion economy by FY28 and reach a size of $6.307 trillion by FY30. This translates into an annual nominal growth rate of nearly 10.2% in dollar terms for FY25 to FY30. To put this in context, in the thirty years between FY94 and FY24, India's dollar gross domestic product (GDP) grew at a compounded annual rate of 8.9%. So, the IMF expects India to grow at a significantly higher rate of 10.2% in dollar terms in the next five years,” the Economic Survey says.

In rupee terms, India's nominal GDP grew at a compounded annual rate of 12.4% in the three decades ending FY24. In the next five years, the IMF projects that India's nominal GDP will grow at around 10.7% annually. So, in effect, given the projected growth rate of only 10.2% in dollar terms, the Fund expects the rupee to weaken, on average, only by 0.5% per annum in the next five years, compared to the 3.3% annual depreciation experienced in the three decades up to FY24, it says.

The projected mild rupee depreciation is a recognition of India's growth potential, its attractiveness as an investment destination and the expectation of convergence of India's inflation rate with that of the United States, states the Economic Survey. The IMF also projects that India's current account deficit will rise gently and gradually to 2.2% of GDP by FY30. To reiterate, given the current state of the world and its likely evolution, the realisation of these projections will be a very good thing for India, says the survey.

The Ministry of Statistics and Programme Implementation reckons in the first advance estimate the economy will grow at 6.4% in constant prices. For FY26, the Economic Survey forecasts a growth rate of between 6.3% and 6.8%. This is in line with the Fund's projection of the growth rate of India's GDP at constant prices at around 6.5% between FY26 and FY30, the survey notes.