$5 Tn Economy: PHDCCI Suggests Strategies To Achieve Target

The nominal gross domestic product (GDP) will grow at 12-12.5 per cent (8 per cent real GDP and 4-4.5 per cent inflation) in the current financial year and the economy will attain a size of USD 3350-3400 billion in 2022-23, according to a report by PHD Chamber of Commerce and Industry. 

The size of the economy is expected to touch USD 5 trillion by 2026-27, according to an analysis conducted by an industry body. 

The nominal GDP is expected to grow at more than 12 per cent (average) in the next 5 years, as mentioned by PHDCCI.

According to the report, the agriculture and food processing sector has emerged as one of the most prominent sectors to move forward and to achieve a size of USD 5 trillion by 2026-27. 

India’s growth trajectory will remain highest among the leading economies in 2022-23 supported by various dynamic reforms undertaken by the government during the last two years, said Pradeep Multani, President, PHDCCI in a press statement.

"The sector is growing promising both in production and exports," said Multani.

However, the inflation scenario has been stoked by rising international commodities prices, particularly crude oil prices, said Multani. 

Though geo–political conflicts will undermine the world GDP growth by 0.5 percentage points, the Indian economy is expected to remain resilient on the back of its inherent strengths, strong economic fundamentals and growth promising sectors, he said.  

The industry body has suggested 10 prolonged strategies to strengthen the economic growth and to achieve USD 5 trillion in the next 5 years by 2026-27:

1. Refueling of consumption demand will have a multiplier effect on production possibilities, private investments and employment creation.

2. Accommodative policy stance should be continued by RBI to strengthen the growth till it becomes more strong and sustainable.

3. Speedy Infrastructure Investments to give a multiplier effect. The robust growth of infrastructure is the key ingredient to realising the vision to become Atmanirbhar Bharat.

4. More and more sectors should be covered under the PLI scheme. The scheme has to be instrumental in accelerating domestic manufacturing capabilities and strengthening economies of scale. 

5. Level playing field for the Indian industry should be focused on the competitiveness of enterprises. Free Trade Agreements must be looked into the scenario of market access opportunities in the destination economies.

6. As the recovery process has coincided with the geopolitical developments; the economy should be supported with continued reforms for the businesses, particularly for the MSMEs and agriculture sector. 

7. The increase in public investments in agricultural infrastructure would attract private investments in cold storage, warehousing and supply chain of agriculture produce in order to reduce food wastages and get them to urban citizens at moderate rates.

8. To support the consumption and private investments in the country. Escalation in the international commodity prices should be addressed with a reduction in the excise duties on the key raw materials and easing the supply chains. The petroleum products that stoke inflation to a higher level should be brought into the ambit of GST.

9. Although procedural requirements have been relatively reduced and the communication between government departments has become transparent and hassle-free, however, the cost aspect still needs to be relaxed further. There must be a focus on reducing the cost of doing business with ease of doing business and becoming robust at the factory level.

10. The government should handhold the industry with a major focus on manufacturing to achieve a higher and sustainable economic growth trajectory to create new avenues for job creation and competitiveness of the enterprises at the global level. The decriminalisation of minor offences would go a long way to building the confidence of the entrepreneurs and attract a large chunk of investments from domestic and international investors.