In 2019 budget, Narendra Modi looks to China’s rise to propel India to a US$5 trillion economy
- He set a target of almost doubling India’s economy by 2024 on the back of higher investment, savings and exports in the way China’s achieved its growth
Finance Minister Nirmala Sitharaman, presenting the 2019-20 budget statement to parliament on Friday, said the government planned structural reforms to kick-start foreign and domestic investment.
Modi has set a target of growing India into a US$5 trillion economy by 2024/2025 from US$2.7 trillion that a government report on Thursday said will be done on the back of higher investment, savings and exports in the way China’s growth was propelled.
“We need to invest heavily in infrastructure, digital economy, job creation,” Sitharaman said, adding India is set to become a US$3 trillion economy in the current financial year.
But economists say scaling up Asia’s third largest economy in rapid fashion will need bold reforms including freeing up land and labour markets, which Modi shied away from in his first term for fear of political backlash.
Capital Economics said in a note on Friday that reaching that target “is dependent in large part on achieving real GDP growth of 8 per cent a year, which we think is unlikely.”