IMF's Subramanian Forecasts 8% Growth For Indian Economy Until 2047

Subramanian underscored that while aiming for an 8 per cent growth target may seem ambitious, given India's historical growth patterns, it remains achievable with concerted efforts

Krishnamurthy Venkata Subramanian, India's executive director at the International Monetary Fund (IMF), expressed on Thursday that the Indian economy has the potential to sustain an 8 per cent growth trajectory until 2047. He emphasised the importance of doubling the effective policies implemented over the past decade and accelerating reforms. 

Subramanian underscored that while aiming for an 8 per cent growth target may seem ambitious, given India's historical growth patterns, it remains achievable with concerted efforts.

"So, the basic idea is that with the kind of growth that India has registered in the last ten years if we can redouble the good policies that we have implemented over the last ten years and accelerate the reforms, then India can grow at 8 per cent from here on till 2047," he said at the Times Now Summit in Delhi.

India's economy outperformed expectations, expanding by 8.4 per cent in the last quarter of 2023, marking the fastest growth rate seen in the past eighteen months. This robust growth in October-December has propelled the estimate for the current fiscal year to 7.6 per cent.

"And if India grows at 8 per cent, India can be a $55 trillion economy by 2047," Subramanian added.

Subramanian highlighted the historical trend, noting that since 1991, India has maintained an average growth rate slightly exceeding 7 per cent. He underscored the imperative for India to bolster its domestic economy, citing that approximately 58 per cent of the country's GDP is derived from domestic consumption.

"Therefore, you know, we do have the potential if we can create enough jobs, you know, that will lead to much higher consumption," he said.

The executive director representing India at the IMF emphasised the importance of fostering the manufacturing sector to stimulate job creation. He also highlighted the necessity of reforms in the land, labour, capital, and logistics sectors.

"Reforms are required in the manufacturing sector, but at the same time, we also need reforms in our banking sector to provide credit for the manufacturing sector," Subramanian added.