India can be $8 trillion economy in less than 15 yrs: Panagariya

Could displace Japan to become third largest economy

With higher savings rate and robust economic growth, India can become a $ eight trillion economy in less than 15 years, overtaking Japan to become according to Arvind Panagariya, Vice Chairman, NITI Aayog.

The prospects for India to become the third largest economy of the world, placing it above Japan, in less than fifteen years are excellent today,  Panagariya said delivering sixth R. K. Talwar Memorial Lecture organized. The lecture was organised  by Indian Institute of banking and Finance (IIBF) here.

Taking into account the real appreciation of the rupee, during the decade of 2003-04 to 2012-13, India has grown above 10 percent per annum in real dollars.  At this pace, India can turn its current $ two trillion economy at 2014-15 prices into $ eight trillion in fifteen years or less.

“Can India grow at the rate it grew during 2003-04 to 2012-13?  The answer is a resounding yes.  The savings rate remains nearly 30 percent of the GDP with prospects to rise above 35 percent, a level reached in 2007-08”, NITI Aayog chief asserted.

India has a young population so that labour shortages will not be an impediment to growth.  India also remains an open, competitive economy.  The per-capita income being low, India is far from the global technology frontier so that India has a lot of scope to catch up.  

Above all, the country has a highly motivated and responsive government at the center and governments in numerous states that are in a race with each other to move the nation forward at a brisk pace, he said.