Charting a realistic path of India’s growth
- If becoming No. 3 is the concern, India is already there if GDP is measured by purchasing power parity. If India is to achieve its aspirations, it needs to address underlying bigger obstacles to push itself to a higher-income club.
India is considered to be a promising emerging market story. It grew at an average annual pace of 6.6% in the decade to 2019-20. In 2022-23, with a growth rate of 7.2%, India outperformed most other major economies. The International Monetary Fund (IMF) predicts the country will grow by over 6% in the next few years, and is on track to be the world’s third largest economy. This is creditable, but it is worth remembering that growth rate is the only GDP metric on which India does well. A different, less bullish narrative emerges when we dig deeper into the GDP data, one that gives a more realistic view of economic growth.