India To Become $10 Trillion Economy by 2026

[randomradio]

If that is so I can say that Pakistan currency de-valued also after 2008 recession and if it wouldn't had happened Pak economy will be double that of today but believe me it doesn't mean that your country grew, actually it didn't. A growing economy always maintain its currency or de-value its local currency to increase exports. Look, now russian rubble is de-valuing also and Russia cannot put blame on international sanctions and say that our economy is growing but our currency de-valued that's why our GDP isn't growing. Russian rubble isn't the reason of its economy not growing. Oil prices reduction is the reason by which russia suffered a lot and is still suffering.

I'll explain it to you here look:-
India can de-value its currencyand by de-valuing there will be more paper notes available but it doesn't mean that Indian economy grew. It means that India currency paper note worth has reduced in front of dollars and this is the reason GDPs are measured in dollars because it seems the most powerful and stable currency.

You've oversimplified it.

Pakistan has very little growth, so there is no comparison. It almost defaulted.

Russia is not growing at all, it is contracting.

India is growing really fast. The INR has devalued primarily because of external circumstances. The dollar has become strong and euro has become weak. In that sense, all emerging markets have contracted and devalued because they depend on trade while India doesn't. It happened because investors pulled their dollars back into their own markets.

India's GDP in terms of dollars is completely worthless because it only shows a demand-supply gap. Unlike most other emerging countries, India is led by the services sector and domestic consumption, not manufacturing and trade. This means the need for dollars is very less in India because INR takes care of all our expenses. Meaning, we build our own infrastructure, we do our own investments etc. That's the reason why our dollar GDP is so low. It doesn't in any way mean that our economy is small or weak. When dollars leave the Indian market, the rupee slides, that's all.

In fact, India's purchasing power is more than Germany, UK and France combined. It is about 20-30% more. What is dragging India down is not the economy, but the socioeconomic problems because we have a lot of poor. And because we are insulated from the global economy and its shocks, we are tigers at home and pussycats outside which makes India's economy only appear to be weak.

The fact is India has one of the largest road and rail networks, and is also the third highest energy consumer. Such a feat is not possible if India's economy is smaller than the UK's.

 

[Nilgiri]

You've oversimplified it.

Pakistan has very little growth, so there is no comparison. It almost defaulted.

Russia is not growing at all, it is contracting.

India is growing really fast. The INR has devalued primarily because of external circumstances. The dollar has become strong and euro has become weak. In that sense, all emerging markets have contracted and devalued because they depend on trade while India doesn't. It happened because investors pulled their dollars back into their own markets.

India's GDP in terms of dollars is completely worthless because it only shows a demand-supply gap. Unlike most other emerging countries, India is led by the services sector and domestic consumption, not manufacturing and trade. This means the need for dollars is very less in India because INR takes care of all our expenses. Meaning, we build our own infrastructure, we do our own investments etc. That's the reason why our dollar GDP is so low. It doesn't in any way mean that our economy is small or weak. When dollars leave the Indian market, the rupee slides, that's all.

In fact, India's purchasing power is more than Germany, UK and France combined. It is about 20-30% more. What is dragging India down is not the economy, but the socioeconomic problems because we have a lot of poor. And because we are insulated from the global economy and its shocks, we are tigers at home and pussycats outside which makes India's economy only appear to be weak.

The fact is India has one of the largest road and rail networks, and is also the third highest energy consumer. Such a feat is not possible if India's economy is smaller than the UK's.

Bro, too many Pakistani posters on this thread and forum fundamentally don't understand what Purchasing Power Parity means conceptually compared to nominal GDP. I appreciate you trying to educate/reason with a number of them...but you will find yourself worn out pretty soon. I have long stopped recycling and repeating basic info to many of them....and picked my interactions to quality members only. You might find yourself doing the same soon.

 

[randomradio]

Bro, too many Pakistani posters on this thread and forum fundamentally don't understand what Purchasing Power Parity means conceptually compared to nominal GDP. I appreciate you trying to educate/reason with a number of them...but you will find yourself worn out pretty soon. I have long stopped recycling and repeating basic info to many of them....and picked my interactions to quality members only. You might find yourself doing the same soon.

Then I suppose they are in denial.

 

[Mista]

15-16% nominal GDP growth rate for 10 years is just too optimistic. India needs manufacturing and export to unleash her next stage of economic growth. To appreciate 4% every year will just erode away India's cost competitiveness and Modi isn't that stupid to do that just because of national pride. Inflating the economy at 6% is even more stupid. The cost of doing business will increase regardless and investors will run away without price stability.

To reach $10 trillion GDP in 2026, India needs to add around $900 billion to her GDP every year right now and her GDP now is only $2 trillion. US added only $500 billion to her GDP every year despite having an economy almost 10x the size of India's at $18 trillion. It's just not possible.

 

[randomradio]

15-16% nominal GDP growth rate for 10 years is just too optimistic.

I think you're confused between nominal and real GDP. India's nominal growth in 2009 was 21%.

Nominal GDP = Real GDP + inflation

Inflating the economy at 6% is even more stupid. The cost of doing business will increase regardless and investors will run away without price stability.

6% is a very good rate for India. It has been above 8% and more or less at 10% for many years now. We are currently attracting more investment than China is.

Remittances - highest
http://timesofindia.indiatimes.com/...t-of-2015-World-Bank/articleshow/51822766.cms

FDI - highest
http://articles.economictimes.indiatimes.com/2016-04-21/news/72508700_1_fdi-report-cent-fdi-fdi

To reach $10 trillion GDP in 2026, India needs to add around $900 billion to her GDP every year right now and her GDP now is only $2 trillion. US added only $500 billion to her GDP every year despite having an economy almost 10x the size of India's at $18 trillion. It's just not possible.

China added $1.5T in 2011 while it was a $6T economy. Check up on China's growth from 2006 to 2015.

 

[Mista]

I think you're confused between nominal and real GDP. India's nominal growth in 2009 was 21%.

Nominal GDP = Real GDP + inflation



6% is a very good rate for India. It has been above 8% and more or less at 10% for many years now. We are currently attracting more investment than China is.

No, I do. I study economics. I talked about inflation and appreciation in the post.

Remittance isn't investment. The second article doesn't paint the full picture; it only shows greenfield investment. Moreover, FDI stock in India isn't even top 10. Regardless, rapid increase in price levels, by inflation or appreciation, will definitely hurt India's competitiveness.

China added $1.5T in 2011 while it was a $6T economy. Check up on China's growth from 2006 to 2015.

Like you said, $6 trillion in 2011. Thrice the size of present day India, growing at more than 9% and inflation of around 5%. Coupled with depreciation of USD and appreciation of CNY thanks to QE money flowing into China in 2011.

 

[randomradio]

No, I do. I study economics. I talked about inflation and appreciation in the post.

Are you saying that 15-16% figure you quoted was real GDP, then that's extremely difficult. I see either stability or devaluation in the near future for the exchange rate. An appreciation is unlikely, beyond some corrections.

Remittance isn't investment. The second article doesn't paint the full picture; it only shows greenfield investment. Moreover, FDI stock in India isn't even top 10.

I agree with both, but it's a very good start.

Regardless, rapid increase in price levels, by inflation or appreciation, will definitely hurt India's competitiveness.

Even at 6%, it will take many years for India's competitiveness to erode. Regardless, the services sector will still rule the nest. And consumption will still remain the strongest driver for growth. Right now, everything is down. Hopefully, demand will pick up this year so we will know where we are headed.

 

[Mista]

Are you saying that 15-16% figure you quoted was real GDP, then that's extremely difficult. I see either stability or devaluation in the near future for the exchange rate. An appreciation is unlikely, beyond some corrections.

Even at 6%, it will take many years for India's competitiveness to erode. Regardless, the services sector will still rule the nest. And consumption will still remain the strongest driver for growth. Right now, everything is down. Hopefully, demand will pick up this year so we will know where we are headed.

I'm quoting your figure, which I know you mean in nominal terms. I wouldn't even explain if you were talking about real growth rate of 16% for 10 years.

Yeah India's cost is still very low compared to other countries but it is the biggest advantage and eroding it will definitely hurt India. Inner China and ASEAN have the infrastructure, capital, skilled labour force, TPP, and proximity to Coastal China. India needs a lower cost to compete.

India will need manufacturing and exports to power the next stage of rapid growth; services and domestic consumption isn't enough.

 

[somebozo]

India to become this..India to become that..India supah powah..India hyper powah...the fact is that half of Indian exports are garbage..and with the world wide manufacturing economy rebound..India cannot forever float on export garbage on the cheap!

 

[Agent_47]

Even in any moderate calculations India will be $6-$7 billion economy by 2025-26.
Now think about the defence budget as 2% of GDP, It will be $120-140 billion !

 

[Tiger Genie]

I really hope India can be better than the Chinese and NOT blindly ape the Americans. They have to develop in a way that is just as classy as the intrinsic nature and spirit of India. Frenetic leveraged financing and derivative engineering is very suited to the Americans. Compliant mass producing assembly lines of people stations is suitable for China with its monotonic communistic discipline and dictation. The Indian experience is diverse vibrant and individualistic. Same measures are probably not applicable.

Food and shelter for all in India without the indignity of casteism within the next 10 years is worth a million times 10 trillion economy. I am capitalists, market economy enthusiast and I love it for the USA. But it disgusts me to see Antilla built. It is painful to hear RollsRoyce will double in India.

I seriously question Narayanamurthy for not becoming a Bill Gates right away and start eradicating hunger. He can do it. Nilkani can. Premji can. Why don't they?

 

[BetterPakistan]

You've oversimplified it.

Pakistan has very little growth, so there is no comparison. It almost defaulted.

Russia is not growing at all, it is contracting.

India is growing really fast. The INR has devalued primarily because of external circumstances. The dollar has become strong and euro has become weak. In that sense, all emerging markets have contracted and devalued because they depend on trade while India doesn't. It happened because investors pulled their dollars back into their own markets.

India's GDP in terms of dollars is completely worthless because it only shows a demand-supply gap. Unlike most other emerging countries, India is led by the services sector and domestic consumption, not manufacturing and trade. This means the need for dollars is very less in India because INR takes care of all our expenses. Meaning, we build our own infrastructure, we do our own investments etc. That's the reason why our dollar GDP is so low. It doesn't in any way mean that our economy is small or weak. When dollars leave the Indian market, the rupee slides, that's all.

In fact, India's purchasing power is more than Germany, UK and France combined. It is about 20-30% more. What is dragging India down is not the economy, but the socioeconomic problems because we have a lot of poor. And because we are insulated from the global economy and its shocks, we are tigers at home and pussycats outside which makes India's economy only appear to be weak.

The fact is India has one of the largest road and rail networks, and is also the third highest energy consumer. Such a feat is not possible if India's economy is smaller than the UK's.

Whatever you said doesn't justify your claims about currency de-valuation and india growth. You should search on it more. I am present here we will see whether india touches $10 trillion till 2026 or not.

Turkey is very different from India. It has high socioeconomic indicators.

India has a lot of poor people. As they get richer, currency dynamics change much faster.

And India will soon start attracting a huge amount of investments, perhaps far higher than China did. Too many countries with negative interest loans and slumped economies that need to make money. Japan's been providing loans to India with interest rates of 0.1% and 0.3%. That's a lot of forex that will come into India in a short time if other countries follow suit. India could easily start attracting $100B every year as FDI and double that in loans and remittances over the next 20 years.



This is what's happened over the last 4 years. The country kept growing, but the currency devalued at almost the same rate. So even though India's growth has been pretty good at more than 6%, the $GDP stayed stagnant.

2009 - $1365B
2010 - $1708B
2011 - $1835B
2012 - $1831B
2013 - $1861B
2014 - $2048B

From 2010-11 to 2013-14, the economy was practically stagnant in terms of $GPD. But average growth was 6.5%, higher than anybody except China.

2010 GDP in INR was 73T. And it climbed to 150T today. So the actual GDP has doubled. I think electricity production also doubled from 150GW to 300GW, at 11% average. So this happened even though $GDP was stagnant.

In fact, from 2010 to 2016, the average nominal growth was 16%. But the 10-11% average inflation has eaten up all that growth. In 2010 prices, we have only climbed INR 25T. 30% of the economy has been lost to inflation. In 2009, we lost 50% of our growth to inflation even though real growth was 10.5%. So there is lots of room for growth in India. Double digit real GDP growth can easily be achieved. I believe this time next year, we will be talking about double digit growth.

Why do you think so many people hate the UPA? Modi is cleaning up their mess.

Let's see who clean up whom mess and where india reaches till 2026

 

[randomradio]

I'm quoting your figure, which I know you mean in nominal terms. I wouldn't even explain if you were talking about real growth rate of 16% for 10 years.

Considering the discussion so far, not with you, people appear to be confused between the two, so I wanted to clarify.

Like you said, $6 trillion in 2011. Thrice the size of present day India, growing at more than 9% and inflation of around 5%. Coupled with depreciation of USD and appreciation of CNY thanks to QE money flowing into China in 2011.

I just gave that as an example. Meaning, a $1T boost has been done before even from a lower base, 1/3rd that of the US's higher base.

Yeah India's cost is still very low compared to other countries but it is the biggest advantage and eroding it will definitely hurt India. Inner China and ASEAN have the infrastructure, capital, skilled labour force, TPP, and proximity to Coastal China. India needs a lower cost to compete.

It won't erode, because I still see the currency depreciating, or at least being stable, and so do most other economists. The 6% inflation is at best the lowest the country can manage. And I don't know if 6% is sustainable at least this decade. The next 5 years, most of the people will be lifted from poverty and the middle class base will increase like crazy, so we will see high inflation for now.

The currency is overvalued right now because RBI is focusing on reducing the impact of imports.

India will need manufacturing and exports to power the next stage of rapid growth; services and domestic consumption isn't enough.

The right line of thinking is we need better education access to all and create new jobs. I think the biggest change will come from the rise of entrepreneurs who will create these new jobs. Whether this will happen in the industry or not, that is to be seen.

In fact, we will be lucky to reach 30% in the industrial sector even by 2020. No matter how fast the industry sector increases, the services sector will increase by a larger margin, at least 2% or 3% more. And with companies going in for automation, we cannot be sure how the labour market will work then.

According to current trends, agriculture is not growing, industry is more or less stagnant and only recovering over the last 4 months and consumer demand is very low, recovering only now by a bit.

Whatever you said doesn't justify your claims about currency de-valuation and india growth.

I have given you all the figures. $GDP is worthless for India. $GDP is used because businessmen from western countries want to know the markets. And $ is the most stable currency and most world trade happens with it. It is not a real indicator of GDP.

http://www.business-standard.com/ar...apan-in-ppp-terms-says-wb-114043000075_1.html

In real terms India is the 3rd largest economy on the earth. It has the 2nd largest road, 4th largest rail network in the world, it has the 3rd largest energy consumption, the 3rd largest standing army etc. None of this is possible if the economy is 30% smaller than the UK.

So I already told you, as far as the exchange rate is concerned, it doesn't make any difference to the country if the $GDP is $4T or $16T as long as the country is spitting out 10 million cars a year by then.

 

[kaykay]

Once GST bill is passed in Mansoon season, Indian GDP growth will increase by atleast 1% from next year....

 

[BetterPakistan]

I have given you all the figures. $GDP is worthless for India. $GDP is used because businessmen from western countries want to know the markets. And $ is the most stable currency and most world trade happens with it. It is not a real indicator of GDP.

http://www.business-standard.com/ar...apan-in-ppp-terms-says-wb-114043000075_1.html

In real terms India is the 3rd largest economy on the earth. It has the 2nd largest road, 4th largest rail network in the world, it has the 3rd largest energy consumption, the 3rd largest standing army etc. None of this is possible if the economy is 30% smaller than the UK.

So I already told you, as far as the exchange rate is concerned, it doesn't make any difference to the country if the $GDP is $4T or $16T as long as the country is spitting out 10 million cars a year by then.

This is really awful. As long as India don't reach 10 trillion in US dollar terms till then it won't be considered a $10 trillion economy. All Countries are measured in US dollar GDP not only india. In your local currency india gdp in Rupees can increase if your govt print more notes but that doesn't mean that India is growing. I think you need to be mature about economics.

Yeah, India PPP is more than japan but one more thing India population is about 10 times more than japan too.