At a recent event in the Capital, Prime Minister Narendra Modi made a promise that India would become the world’s third largest economy if he gets a third term (2024-2029). Chanakya believes this goal is highly achievable. According to the International Monetary Fund’s World Economic Outlook database, India is projected to overtake Japan and Germany, currently the third and fourth largest economies, by 2026-27, making it the third largest economy, following only the United States and China.
However, two significant questions arise: Is the PM’s statement merely a political reaffirmation of an inevitable outcome? And, should achieving the third-largest economy status lead to complacency on the economic front? The unequivocal answer to both these questions is no. It is essential to delve into these issues in detail.
When India gained independence 75 years ago, it faced the aftermath of Partition and had a small industrial base. Challenges like food security arose due to erratic rains, leading to heavy reliance on overseas grain exports.
India’s journey from economic precarity to becoming a global economic power, while preserving its democratic core (with the exception of the two years of Emergency), is a remarkable achievement and a result of the collective efforts of the Indian people. While there have been ups and downs and necessary course corrections in this economic march, the most significant milestone occurred in 1991 when the government initiated crucial economic reforms that unleashed the country’s economic potential. The current growth surge owes its existence to that bold leap of faith.