According to the International Monetary Fund (IMF), India could become a $55 trillion economy by 2047 if both state and central governments implement policies that boost the nation’s growth rate from its historical average of 7% to 8% (in Rupee terms).

Krishnamurthy V. Subramanian, executive director of the IMF, stated that with sustained 8% growth, the power of compounding could drive India to become a $55 trillion economy.

He added that while this goal may appear ambitious, it is indeed achievable.

Speaking at an event in Hyderabad, the IMF executive noted that in 2020, India’s private credit to GDP ratio was 58%, far below the 200% average in advanced economies.

However, he highlighted the considerable advancements in financial inclusion achieved through various initiatives.

Subramanian’s optimistic growth projections were echoed by Dr Gita Gopinath, the IMF Deputy Managing Director, who expressed hope that India could become the world’s third-largest economy by 2027.

Dr Gopinath added that India’s growth performance exceeded expectations in the last fiscal year, and the positive carryover effects from that period are influencing the IMF’s forecast for the current year.

“The other factor is we see private consumption recovering,” she said.

Her statements followed the IMF's upward revision of India's growth projection for the financial year 2024-25 to 7% within its 'World Economic Outlook' report. 

The revised forecast was driven by new data on FMCG and two-wheeler sales, along with a favourable monsoon, Khaleej Times reports.

Notably, this projection is more optimistic than the 6.5% growth estimate presented by the Union government in its economic survey. 

Gopinath went on to say that India needs to generate an additional 60 to 148 million jobs by 2030 to keep pace with its population growth, while also overhauling its education system to enhance workforce skills. 

She suggested implementing labour codes, pursuing land reforms, improving the ease of doing business and the regulatory environment, and expanding the tax base to advance towards the goal of becoming a developed nation by 2047.

“If you look at India’s projections in terms of population growth, India will have to create anywhere between 60 million and 148 million additional jobs cumulatively between now and 2030...we are already in 2024 so in a short period of time we have to create a lot of jobs,” she said at the Diamond Jubilee Conference of Delhi School of Economics.