India To Become $10 Trillion Economy by 2026

[Nilgiri]

I do not think we are going to see any currency appreciation soon. RBI keeps on buying dollars to increase its chest increasing demand for dollar arresting any significant appreciation in Rupee.

Yup it will take some time till the credit crunch underlying reasons have been addressed.

india is currently growing annually around 7 or 7.5 % annually

That's faster than china who has slowed tom under 7%

50% faster than other BRICS nations and emerging markets

Three as fast as USA

AND 4 times as fast as Euro Zone

India is the fsasterst growomg of all TOP 20 largest economies in nthe world

pretty impressive considdrimg

30% of population in poverty

Depends how you measure poverty. The World Bank says absolute poverty rate in India could have been as low as 12.4% some 6 years ago in 2010 (so who knows what the exact rate is right now...we will have to wait for this years data to come out under the new measuring convention):

http://pubdocs.worldbank.org/pubdoc...09701443800596288/PRN03-Oct2015-TwinGoals.pdf

So there are lots of people now in the low income group, not in sheer absolute poverty, looking to get into the lower middle class. Every class is looking to migrate upwards as quickly as possible.

 

[That Guy]

You must be very weak in Economics and Mathematics to not recognize absurdity of your claim.

Considering stable currency (currencies rarely undergo wide range of fluctuations anyway), for India to become a $10 Trillion economy by .......... India needs to grow at:

2026: Nominal GDP growth rate: 15.34% ; Real GDP growth rate: 9-10% (depending on inflation).

2036: Nominal GDP growth rate: 7.4%; Real GDP growth rate: 0-2% (depending on inflation).

2046: Nominal GDP growth rate: 4.87%; Real GDP growth rate: -4 to -2% (depending on inflation).

Now real GDP growth rate of India this year is 7.8%. Even a half blind person could see which year is more accurate.

Okay genius, what are your calculations? Show me how you got those results?

 

[itachii]

Guys...let's see some hard figures.

1. During 2004-2014 China's nominal GDP has grown by 5 times (5.33 times exactly) with an average annual growth rate of a little less than 10%.

2. During 2000-2010 India's nominal GDP has grown by close to 4 times (3.62 times exactly) with an average annual growth rate of just 7.22%.

India's GDP:

Year 2000 : $474,692,000,000
Year 2005 : $834,215,000,000
Year 2010 : $1,710,910,000,000

We are already more than $2 trillion economy, an average annual growth rate of 7.5% or so can make us a $10 trillion economy in next 10 years. And that's very much possible if things remain on track, considering that our rupee has heavily depreciated from it's 2006-07 level, and it is going to appreciate eventually with a stronger economy.

Just keep in mind the difference between real and nominal growth rate.

@fsayed @temporary12345 @HypocriteHunter @baba1998 @itachii @litefire @randomradio @Nilgiri @kaykay @Kal Muah

I bet we won't make it to 10 tr $ by 2026 sir. But, I will be happy to lose this bet.

 

[temporary12345]

Okay genius, what are your calculations? Show me how you got those results?

It is basic compound interest calculation. I would demonstrate it by one example, step by step:

Principle (GDP now) = $2.4 Trillion

Amount (GDP 2026) = $10 Trillion

Time period= 10 Years.

now by compound interest formula Amount = Principle X ( 1 + rate/100)^number of years or A=P(1+r/100)^n

Taking log on both sides

Log A = Log P + n Log (1+r/100)

Log A - Log P = n Log (1+r/100)

Log (A/P) = n Log (1+r/100)

substituting values:

Log (10/2.4) = 10 Log(1+r/100)

Log (4.1666667)= 10 Log(1+r/100)

0.61978875828 = 10 Log(1+r/100)

0.061978875828 = Log(1+r/100)

Taking antilog on both sides

1.15339715499= 1+r/100

0.15339715499= r/100

15.3339715499= r

Thus nominal rate of growth required for Indian GDP to become $10 Trillion by 2026 is 15.34%. Assuming 6% rate of inflation ,and no currency fluctuation, real GDP growth needed for India to become $10 Trillion economy by 2026 is around 9%. Difficult, but not statistically improbably. China has grown around average 23% nominal during its peak and India has maintained sustained growth rate of around 18% nominal last decade, with its highest touching around 30%.

i cant argue with some one who cannot do simple maths
come back in 2020 and post here

Probably you should apply for a refresher course in mathematics. I certainly have made correct calculation as demonstrated above, and it is you who need to learn some basic math.

I bet we won't make it to 10 tr $ by 2026 sir. But, I will be happy to lose this bet.

We certainly would not. But rather than being "we statistically could not" (growing at 9%+ is not a black swan event. It has occurred regularly in past 50 years); it is more due to weak demand in west which would shave off a couple of point off growth rate. A 9% today is as difficult as 13% of 2006.

 

[Sky Scraper]

Current GDP around $2.2 TRILLION and 7th largest in the world

Current growth rates around 7%

I see hitting $3 trillion plus in 2020 AND overtaking France & UK into 5th place

I see a huge increase inn FDI which is currently around $40 billon a year and reforms and infrasucture projevcts pushing growth to 8 or 9% per year post 2020

This means india will reach $7 trillion around 2026

BUT IF RUPEE DEVALUES then it could be $8 trillion plus

either way india is set to be the 3rd most powerful GDP in the world by 2026 or 2027

current India's GDP is 2.4 thrillion

 

[That Guy]

It is basic compound interest calculation. I would demonstrate it by one example, step by step:

Principle (GDP now) = $2.4 Trillion

Amount (GDP 2026) = $10 Trillion

Time period= 10 Years.

now by compound interest formula Amount = Principle X ( 1 + rate/100)^number of years or A=P(1+r/100)^n

Taking log on both sides

Log A = Log P + n Log (1+r/100)

Log A - Log P = n Log (1+r/100)

Log (A/P) = n Log (1+r/100)

substituting values:

Log (10/2.4) = 10 Log(1+r/100)

Log (4.1666667)= 10 Log(1+r/100)

0.61978875828 = 10 Log(1+r/100)

0.061978875828 = Log(1+r/100)

Taking antilog on both sides

1.15339715499= 1+r/100

0.15339715499= r/100

15.3339715499= r

Thus nominal rate of growth required for Indian GDP to become $10 Trillion by 2026 is 15.34%. Assuming 6% rate of inflation ,and no currency fluctuation, real GDP growth needed for India to become $10 Trillion economy by 2026 is around 9%. Difficult, but not statistically improbably. China has grown around average 23% nominal during its peak and India has maintained sustained growth rate of around 18% nominal last decade, with its highest touching around 30%.

In other words, my skepticism was correct. Not only did you not actually prove yourself right, but failed spectacularly at proving me wrong.

Thanks, but I'll take the IMF's words, rather than yours.

 

[BetterPakistan]

Agriculture growth was 1.1% last year due to bad monsoons, normally it is 4+%. Services sector is growing slowly because it's in a downturn, like agriculture. It only grew at 9% last year, it should go back to 11+%. Traditional industries that were part of previous calculation are facing extremely slow growth, less than 5%. Only new industries that are now part of new calculation are growing, pushing industrial growth to 9.8%. Industrial demand may be growing at 9.8%, but it is not enough because there is a lack of demand from rural and urban India because of the slowdown in other sectors.

Only this year has industry started growing properly again. Basically, everybody in India are now talking about a recovery. We are now waiting for a bountiful monsoon this year, which is going to be crucial for double digit growth because India has been in two consecutive droughts. Growth in agriculture was 4.7% in 2013, -0.2% in 2014, 1.1% in 2015.

http://articles.economictimes.india...1411_1_ds-pai-el-nino-climate-forecast-system

So India is coming out of a recession at 7.9% now. Give it time and you will see the economy in full steam.

More FDI, investment-to-gdp ratio, trade in surplus, subsidies to exports, industry, agriculture sector gonna drive it and special focus on services sector. Low fiscal deficit gonna be beneficial. I know it can happen but I stated if we look at current economic indicators than we can't see it happening till 2026

 

[randomradio]

More FDI, investment-to-gdp ratio, trade in surplus, subsidies to exports, industry, agriculture sector gonna drive it and special focus on services sector. Low fiscal deficit gonna be beneficial. I know it can happen but I stated if we look at current economic indicators than we can't see it happening till 2026

Depending on how we go about it, India could be a $4T economy or even a $16T economy by 2026.

As the economy grows, RBI can weaken the currency to help drive exports and increase the impact of foreign investment. The Chinese did that. They devalued their currency by 800% in stages from 1980 to 1994. So a dollar's worth of investment from the US became $8 when it reached China. The RBI can easily decide to go either way when it comes to currency exchange rates.

When both INR and CNY were stable back in 2005, India's dollar economy was 2 times smaller than China's. Due to weakening of the INR and strengthening of the CNY compared to the USD, the difference is now 6 times. However, on the ground, both countries have grown more or less at the same pace, India is even now a little below two times that of China's GDP compared to 2005, if you don't consider the exchange rate.

Even during the stagnant years between 2012 and 2015, India has actually grown a lot. So even if India stays at $4T in 2026, it won't mean anything because the PPP per capita has more than doubled during the time. India will attract more investment as a $4T economy than as a $10T economy.

 

[BetterPakistan]

Depending on how we go about it, India could be a $4T economy or even a $16T economy by 2026.

As the economy grows, RBI can weaken the currency to help drive exports and increase the impact of foreign investment. The Chinese did that. They devalued their currency by 800% in stages from 1980 to 1994. So a dollar's worth of investment from the US became $8 when it reached China. The RBI can easily decide to go either way when it comes to currency exchange rates.

When both INR and CNY were stable back in 2005, India's dollar economy was 2 times smaller than China's. Due to weakening of the INR and strengthening of the CNY compared to the USD, the difference is now 6 times. However, on the ground, both countries have grown more or less at the same pace, India is even now a little below two times that of China's GDP compared to 2005, if you don't consider the exchange rate.

Even during the stagnant years between 2012 and 2015, India has actually grown a lot. So even if India stays at $4T in 2026, it won't mean anything because the PPP per capita has more than doubled during the time. India will attract more investment as a $4T economy than as a $10T economy.

Yeah could be and i also said could be but current indicators don't let us see that happening. I remember a CEO in india stated that india could be a $10 trillion economy by 2032
http://articles.economictimes.indiatimes.com/2016-04-22/news/72536372_1_growth-rate-amitabh-kant-gdp

Predictions are not always correct but we all should hope for the best

 

[LOGICAL BOSSS]

This is the biggest joke of today on PDF.
Dont make yourself fool, live in real world.

 

[Nilgiri]

In other words, my skepticism was correct. Not only did you not actually prove yourself right, but failed spectacularly at proving me wrong.

Thanks, but I'll take the IMF's words, rather than yours.

I understand your skepticism, but what are the IMF's words exactly?

Their data clearly shows India has achieved 18% total nominal growth for a good span of years I mentioned before reaching as high as 30% as the gentleman earlier quoted.

The way I see it the worst case scenario is the base IMF prediction continuing to 2026 and reaching around 6 trillion or so USD. The best case scenario could very well be 10 trillion depending mostly on the appreciation "rubber band" flexing back and the level this happens. So 6 - 10 trillion in nominal amounts is not a bad estimate range, we will have to wait and see what materialises of course. The IMF has got projections very conservative in the past (you will often see this mainfest in their data even when there are sudden "jumps" like the 30% growth year that they insert to try smoothen out their overall data/projection curves)....because the IMF knows it cannot predict the nominal USD climate to any degree of high precision given only the US fed prints US dollars and no other country does....hence this thing called the exchange rate which is another can of worms to deal with when projecting (its nigh impossible during growth spurts of countries compared to fundamentals like investment rate "transfer" to growth).

Thats why its more important to be concerned with PPP in the first place, since that represents the actual physical consumption thats going on rather than the straight exchange of its local currency worth into USD.

 

[randomradio]

Yeah could be and i also said could be but current indicators don't let us see that happening. I remember a CEO in india stated that india could be a $10 trillion economy by 2032
http://articles.economictimes.indiatimes.com/2016-04-22/news/72536372_1_growth-rate-amitabh-kant-gdp

Predictions are not always correct but we all should hope for the best

I think you misunderstood. India is guaranteed to grow fast, maybe even double digits. When that $10T will be reached is merely opinion today. It can even happen by 2020, although that is entirely undesirable.

Basically, it is in India's interest that the rupee remain weak because more jobs are created, and it is in the industry's interest that the rupee be undervalued because they earn more when the currency is exchanged. But once India reaches a certain point in world trade, other countries will start putting pressure on India to strengthen the rupee, which is what's been happening to China since 2006.

So India's local economy will be far stronger as a $4T economy than as a $16T economy in 2026. And it is up to the RBI to find the balance between the two figures.

Basically India is a INR 150T economy or a $9T economy. These numbers cannot be tweaked. But the $2.3T can be tweaked as necessary because it is exchange rate dependent. And that exchange rate is decided by the RBI, not by companies or the govt.

 

[Nilgiri]

I think you misunderstood. India is guaranteed to grow fast, maybe even double digits. When that $10T will be reached is merely opinion today. It can even happen by 2020, although that is entirely undesirable.

Basically, it is in India's interest that the rupee remain weak because more jobs are created, and it is in the industry's interest that the rupee be undervalued because they earn more when the currency is exchanged. But once India reaches a certain point in world trade, other countries will start putting pressure on India to strengthen the rupee, which is what's been happening to China since 2006.

So India's local economy will be far stronger as a $4T economy than as a $16T economy in 2026. And it is up to the RBI to find the balance between the two figures.

Basically India is a INR 150T economy or a $9T economy. These numbers cannot be tweaked. But the $2.3T can be tweaked as necessary because it is exchange rate dependent. And that exchange rate is decided by the RBI, not by companies or the govt.

Very interesting perspective of explaining it. Enjoyed reading it.

 

[BetterPakistan]

I think you misunderstood. India is guaranteed to grow fast, maybe even double digits. When that $10T will be reached is merely opinion today. It can even happen by 2020, although that is entirely undesirable.

Basically, it is in India's interest that the rupee remain weak because more jobs are created, and it is in the industry's interest that the rupee be undervalued because they earn more when the currency is exchanged. But once India reaches a certain point in world trade, other countries will start putting pressure on India to strengthen the rupee, which is what's been happening to China since 2006.

So India's local economy will be far stronger as a $4T economy than as a $16T economy in 2026. And it is up to the RBI to find the balance between the two figures.

Basically India is a INR 150T economy or a $9T economy. These numbers cannot be tweaked. But the $2.3T can be tweaked as necessary because it is exchange rate dependent. And that exchange rate is decided by the RBI, not by companies or the govt.

I never said that it can't happen, i just explained the current trends doesn't reflect it happening and no one know what is going to happen in a decade. I wish for the best. Even goldman sachs predicted india to touch $5 trillion till 2026 which can be predictable and is possible seeing current trends of indian economy.

 

[randomradio]

I never said that it can't happen, i just explained the current trends doesn't reflect it happening and no one know what is going to happen in a decade. I wish for the best. Even goldman sachs predicted india to touch $5 trillion till 2026 which can be predictable and is possible seeing current trends of indian economy.

The economy is going back to 8+% growth.
http://www.ft.com/cms/s/0/06b63142-2748-11e6-8ba3-cdd781d02d89.html#axzz4BT5RbywC

India’s economic growth accelerated to 7.9 per cent in the first quarter,

The industry's happy.

Chandrajit Banerjee, head of the Confederation of Indian Industry, called the figures “a cause for cheer”.

And farmers have reason to celebrate.
http://www.ndtv.com/india-news/2016-monsoon-will-be-above-normal-says-met-office-1394673

The announcement from the weather office brought widespread relief. "Farm production is expected to be better in 2016-17 on account of the above normal monsoon," said Agriculture Minister said Radha Mohan Singh.

"This should be good for the country, good for economy and good for farmers," Science Minister Dr Harsh Vardhan told NDTV.

The current trends look good.

Even goldman sachs predicted india to touch $5 trillion till 2026

Such predictions are useless.

Goldman Sachs predicted Russia would overtake Italy in around 2015 ten years ago. Look at where Russia is now, barely at $1T when they were at $2T just a few years ago. These predictions can't deal with exchange rate fluctuations.

All that matters is India's PPP figure will keep growing. Western countries love exchange rate GDP because that's where they make money. Citibank predicts India will be a $85T economy in 2050 on PPP basis.