While addressing the fifth governing council meet of NITI Aayog last Saturday, June 15, 2019, India Prime Minister Narendra Modi talked about the goal of making India a $5 trillion economy by 2024.
We looked at the latest IMF data forecast to determine whether this goal is achievable. In this article, we will present the forecast charts for India GDP, India Real GDP Growth, and India GDP per capita.
India GDP by prime ministers 1980-2020
On April 15, 2019, we published an article having data charts on India GDP indicators by prime ministers from 1980-2020. The chart below presents India GDP by prime ministers from 1980 to 2020. Of all the prime ministers, India GDP increased most during the 10-year tenure of Dr. Manmohan Singh. India GDP nearly tripled from $0.7 trillion to $2.1 trillion from 2004 to 2014. As per IMF, India GDP would reach $3.0 trillion in 2019.
India GDP Forecast 2019-2024
As per the IMF forecast, India GDP would reach $4.7 trillion by 2024. The chart below provides the India GDP forecast for the next five years.
India Real GDP Growth Forecast 2019-2024
As per the IMF forecast, India GDP would need to grow between 7% and 8% for the next five years in order to reach $4.7 trillion by 2024. The chart below provides India real GDP growth forecast for the next five years. In case a global recession strikes during the next five years (and there is a strong probability that it will), these real GDP growth numbers would be very difficult to achieve.
India GDP per capita Forecast 2019-2024
When we talk about GDP and real GDP growth, we also like to analyze the GDP per capita. It is one of the key indicators to determine whether a nation is developed or developing. The chart below presents India GDP per capita by prime ministers from 1980 to 2020. India GDP per capita was about $2K during 2018.
As per the IMF forecast, India GDP per capita would reach $3,277 by 2024. The chart below provides the India GDP per capita forecast for the next five years.
World Top-20 Countries by GDP during 2019 and 2024 and their GDP per capita (GDP PC) rankings
So, how does India compare with the other countries in terms of GDP and GDP per capita? The chart below provides the world top-20 countries ranked by their GDP during 2019 and 2024. It also provides their GDP per capita ranking.
As we can see, India is a mega economy - the fifth largest in the world in terms of GDP. As per the IMF forecast, India would continue to be the fifth largest. While India GDP gap with UK and France would grow, India will continue to lag behind Germany and Japan. To become the third largest economy, India would have to wait until 2030, or even 2035. Achieving first or second rank appears far distant.
If we look at the GDP per capita data, India was ranked 145 during 2019. By 2024, India GDP per capita rank would improve marginally to 137.
What should be the real goal of Indian political leaders?
We believe that Indian political leaders should be setting goals to improve India GDP per capita rather than just looking at the India GDP numbers. The goal should be not only to improve the economic activity but also to improve the standard of living of the individuals. The economic activities will raise the well-being of the individuals, but the measures should also be taken to control India’s rapidly growing population.
India population would exceed that of China over the next 10 years. This will create lots of challenges for India, given the finite natural resources. The chart below compares the India and China GDP per capita over the past 30 years. During 1990, India GDP per capita was $385. It was higher than China GDP per capita of $349. Because of China economic initiatives and population control measures such as one-child policy, China GDP per capita has been growing much faster than India. In 2019, China GDP per capita would be nearly five-times that of the India GDP per capita.