India to be $5.6 trillion economy by 2020

[aladin123]

India will become a $5.6 trillion economy by 2020, according to research firm Dun and Bradstreet, which has predicted a three-fold jump in the country's GDP from $1.7 trillion last fiscal on the back of rapid investment and growing consumer expenditure.

"Indian economy will become a $5.6 trillion economy by fiscal 2020, at current market price, from the $1.73 trillion in fiscal 2010-11," said Dun & Bradstreet India Senior Economist Arun Singh.


The rate of investment, consumer expenditure and infrastructure spending will be the driving force behind the country's economic growth over the next 10 years, he said, adding that these conclusions are part of a D&B report - titled, 'India 2020' - which is scheduled to be released on Thursday.

The share of discretionary spending is projected to increase considerably to 72 per cent of private consumption expenditure from around 60 per cent in FY'10.

Besides, the share of the services sector is expected to surge from 57.3 per cent of the GDP in FY'10 to 61.8 per cent in FY'20.

Another major contributor to the growth would be rapid investment in the infrastructure area. Infrastructure sector spending is expected to rise to 12.1 per cent of the GDP by FY'20 from around 7 per cent of the GDP in FY'11.

In terms of regions, eight states - Maharashtra, Gujarat, Andhra Pradesh, Bihar, Madhya Pradesh, Rajasthan, Orissa and Uttar Pradesh - would contribute 71 per cent of the total GDP in the next 10 years, as compared to 66 per cent in FY'10.


Further, the report said Maharashtra, Gujarat and Andhra Pradesh will be amongst the most developed states in the country by 2020 and would together contribute 32 per cent to the overall GDP.


The BIMAROU states (Bihar, Madhya Pradesh, Rajasthan, Orissa & Uttar Pradesh) are also expected to contribute significantly to India's growth story during the current decade.


The contribution of BIMAROU states will be about 24 per cent of the GDP by FY'20, as compared to 21 per cent during FY'10, Singh said.

Notably, four of the five BIMAROU states are expected to see a double-digit average growth over the current decade.

Apart from the investment rate, consumer expenditure and infrastructure spending, growth would also hinge on effective policy measures that would encourage sectors like manufacturing and retail.


At the policy end, direct cash subsidy, NREGA, UID, environment and national manufacturing policies, FDI in some of the sectors such as retail and insurance, would play a pertinent role in India's growth story," Singh added.

He further said coordination between the state and central governments would help in removing bottlenecks to growth.


When asked whether inflation and hardening of interest rates would play spoilsport to growth, Singh said, "In a short term, definitely, this is cause for concern... But we have seen a moderate economic growth in India.

"The story is so far quite encouraging. If we remove that fiscal 2011-12, we are at better position compared to our counterparts."


link:India to be $5.6 trillion economy by 2020 - Rediff.com Business

what about rest of the states?

 

[rollindays]

@rolling: Annual compounding rate of 13.9percent
On topic: I hate these pointless predictions

Thanks! Now that you mentioned the fact that it is annual compounding rate, @ 13.9% annually; I got the GDP calculation to be $5.58 trillion for the year 2020. Pretty pleased with my Math skills.

 

[rollindays]

On a sidenote though, an assumption of an average GDP growth of 13.9% for the next 9 years is a very skeptical one to be honest, considering the fact that the GDP growth rate for India this year is at 7.8%; considering India's GDP growth rate % has never touched the double digit figure from what I can remember, & was 8.3% for the last quarter of last year.

 

[Abhishek_]

^truth. Most indian members hate these kind of predictions.
It seems to be a fad in the media and I hope it dies soon

 

[aladin123]

This will be true if india achieve double digit growth rate ...
right now we are emerging through second phase of reformation like abolishing rest of the license raj(e.g. still today if any company needs to recruit more than 100 employees at a time then it needs lisense from govt) building infrastructure rapidly etc.... as a result of this
reformation india should achieve 11-13% growth rate from the 2013 and onwards. Those above mention states particularly Andhra Pradesh,Gujrat, Maharastra ,orissa are at the eye of many industrialist oranizations already huge investment is going on there.

 

[Tshering22]

I wish they cut down on the inflation. That is killing investment especially in tourism and transport sector due to killer double taxation on fuel. That kills have the desire to travel and spend and the remaining half puts off the investors. If they can somehow reverse this in the following year, we can expect to attain this figure before 2020.

 

[khurasaan1]

Can someone explain to me what average GDP growth rate % has been assumed for the next 9 years?

I selected an average GDP growth rate of 10% for the next 9 years, & did a little calculation:

GDP nominal of India for 2011: $1.73 trillion

10% of $1.73 trillion is $0.173 trillion.

Hence:

1.73 + 9(0.173) = $3.287 trillion in 2020

Even when I used an average 15% GDP growth rate for the next 9 years, the GDP for 2020 came out to be $4.066 trillion.

There must be some other way to calculate this. Can someone show me how they got the $5.6 trillion economy number by 2020?

they addingup the GDP amount included within the new principlal amount for calculating GDP every year. thats how they can get to 5.6Trillion $ amount....U can think of farmula they use for calculating the interest rate after cartain years over the principal amount within the banking systems.

 

[muse]

Whether inflation or calculations that are optimistic - the larger point I think is that it gives economic managers and the people, a goal or a target to shoot for -- It injects optimism and hope in the economy and Indians should allow this wave of optimism to extend growth and development to those areas that have not as yet caught with high growth areas - a prosperous India is a safer India, safe for her citizens and for her neighbors.

 

[rollindays]

This will be true if india achieve double digit growth rate ...
right now we are emerging through second phase of reformation like abolishing rest of the license raj(e.g. still today if any companyneeds to recruit more than 100 employees at a time then it needs lisense from govt) building infrastructure rapidly etc.... as a result of this
reformation india should achieve 11-13% growth rate from the 2013 and onwards. Those above mention states particularly Andhra Pradesh,Gujrat, Maharastra ,orissa are at the eye of many industrialist oranizations already huge investment is going on there.

I don't know, the trend that has been emerging from the data from last year & this year has not been encouraging for India:

GDP growth rate % 2010 Q1: 9.40
GDP growth rate % 2010 Q2: 9.30
GDP growth rate % 2010 Q3: 8.90
GDP growth rate % 2010 Q4: 8.30
GDP growth rate % 2011 Q1: 7.80

With the constant corruption cases & scams coming up with the existing government in power, I don't know whether assuming double digit growth rates for the next 9 years for India is realistic or not.

 

[aladin123]

they addingup the GDP amount included within the new principlal amount for calculating GDP every year. thats how they can get to 5.6Trillion $ amount....U can think of farmula they use for calculating the interest rate after cartain years over the principal amount within the banking systems.

you need to learn compound interest ... at 8% growth india can achieve near to 4 trillions but an double digit growth is required to achieve this goal ....

 

[rollindays]

-------------------

 

[hawx]

I don't know, the trend that has been emerging from the data from last year & this year has not been encouraging for India:

GDP growth rate % 2010 Q1: 9.40
GDP growth rate % 2010 Q2: 9.30
GDP growth rate % 2010 Q3: 8.90
GDP growth rate % 2010 Q4: 8.30
GDP growth rate % 2011 Q1: 7.80

With the constant corruption cases & scams coming up with the existing government in power, I don't know whether assuming double digit growth rates for the next 9 years are realistic for India or not.

everything will be a reality after Jan lokpal bill becomes a law !!!!!!!

gov has no choice but to pass the bill now,and after that we will curb corruption and grow by leaps and bounds !

myself hawx one of the 750 million Indians with less than 30 years of age !

 

[Abhishek_]

^over-excited kids
rolling is making fact based statements, I suggest you do the same (or wait till you have facts to back up yours)

 

[aladin123]

With the constant corruption cases & scams coming up with the existing government in power, I don't know whether assuming double digit growth rates for the next 9 years for India is realistic or not.

agree .. corruption is the biggest threat

 

[rollindays]

Whether inflation or calculations that are optimistic - the larger point I think is that it gives economic managers and the people, a goal or a target to shoot for -- It injects optimism and hope in the economy and Indians should allow this wave of optimism to extend growth and development to those areas that have not as yet caught with high growth areas - a prosperous India is a safer India, safe for her citizens and for her neighbors.

One needs to be realistic as well. China has barely been able to have GDP growth rate % greater than 10% for 3 quarters, from 2009 to 2011. Not to sound patronizing, but India has not even reached the double digit figure once for even a single quarter.