India Expected To Outstrip Britain To Become World's 5th Largest Economy In 2019: Finance Minister
Finance Minister Arun Jaitley today expressed hope that India shall outdo Britain in the year 2019 and be amongst world's top 3 economies in the next 10-20 years
Photo Credit : Himanshu Kumar
Finance Minister Arun Jaitley today said India is expected to surpass Britain next year to become world's fifth largest economy. "This year, in terms of size, we have overtaken France. Next year we are likely to overtake Britain. Therefore, we will be the fifth largest (economy)," he said here.
Other economies in the world are growing at a much lesser rate, he said, adding that India has the potential to be among top three economies of the world in the next 10-20 years. "This year, in terms of size, we have overtaken France. Next year we are likely to overtake Britain. Therefore, we will be the fifth largest (economy)," he said while inaugurating the office building of the Competition Commission India (CCI).
The International Monetary Fund (IMF) last year placed its bets on India outdoing Britain as world’s fifth largest economy. India's gross domestic product (GDP) was valued at USD 2.597 trillion at the end of 2017 overtaking French economy, which was amounted at USD 2.582 trillion last year.
However, in terms of per capita GDP, India still lags far behind France, which is nearly 20 times bigger in comparison. This is because of the huge size of India's population, which is estimated to be around 134 crore as against 6.7 crore of France.
The UK economy stood at USD 2.94 trillion at the end of 2017. India recorded a growth of 6.7 per cent in FY'18 and expected to accelerate to 7.4 per cent in the current financial year on pick up in industrial activity and good monsoon. Jaitley said the country has potential to overtake large economies which are growing at a much lower rate than India. "We grow at 7-8 per cent on an average. So for us to overtake them...you are unquestionably going to be as the world projections are amongst big three in size (by 2030-40)," he said.
The growth would be driven by expanding economic activities, he said, adding that "over the next 10-20 years we still have lot of avenues for pushing our growth. For instance, growth is more in the North, the South and western part of the country... Eastern side has still to grow faster. That's an area we will see growth."
With growth in economy, Jaitley said, the function of CCI, the country's fair trade regulator, is going to expand and the institution should keep evolving itself with new challenges.
"Over the next 10-20 years with economic activity expanding, your (CCI) role is going to expand and therefore both the bar and experts who man this institution will be required to be trained professionals rather than who are unable to fully diagnose the situation," he said.
India can already see the ripples of a consumption economy in India, he said, adding that the exponential growth taking place in several sectors will lead to large number of domestic and international players.
He further said that the size of economy is going to expand and some will not comply with fair market regulation, indulge in cartelisation, have vertical or horizontal tie ups, abuse dominant position to impact prices or dilute competition.
"Therefore, the regulatory mechanism to regulate all the Mergers & Acquisitions would be required. These changes to be extremely large and the impact on markets is going to be very large," he said.
India with its $2.6 trillion economy in 2017 became the world’s 6th largest economy outpacing France. Meanwhile, with a predicted GDP growth rate between 7-7.5 per cent, the country has the potential to become the 5th largest economy in the world, outstripping the UK.
India has pipped out of its shell of being a sluggish economy faster than any other emerging country in the world and with this some even talk of the proposition that it could surpass China as the world’s largest economy by 2050. The IMF projections even place India outpacing China’s GDP growth rate over next 4-5 years.
The country has made great economic strides in the last decade with then Finance Minister Manmohan Singh opening the Indian economy to the world in the 1990s. Although, India has a lot of domestic concerns to deal with, it still holds a lot of promise and is sure to have arrived big on the world stage.