India on track to move to a US$5 trillion economy by 2024: Ambassador of India

  18 February 2020    Read: 1051
India on track to move to a US$5 trillion economy by 2024: Ambassador of India

Commenting on the Indian economy, Ambassador of India Mr. B. Vanlalvawna said that India, the 5th largest economy in the world, remains on track to move to a US$5 trillion economy by 2024.

Fundamentals of India's economy remains strong with solid structural reforms, inclusive growth and well-contained inflation. The country has achieved an all-time high accumulation of foreign exchange reserves of US$457.5 billion as of December 2019. He highlighted the budget proposals for the Financial Year 2020-21, which is structured on the theme of “Ease of Living”, presented by the Finance Minister of India on 01 February 2020. The budget allocated US$28.18 billion to 16 action points in agriculture, irrigation and rural development. Allocation for health sector was US$9.72 billion whereas US$13.99 billion was allocated for Education Sector.

According to the Ambassador, the Indian Budget 2020-21 also gave a boost to the development of industry and commerce with an allocation of US$3.85 billion for development and promotion of Industry and Commerce. Five new Smart Cities have been proposed to be developed with States in Public Private Partnership mode. Investment on infrastructure over the next five years is expected to touch US$1.4 trillion and 100 more airports are to be developed by 2024 to support ‘Udaan’ Scheme. The budget put emphasis for nutrition-related programme and allocated US$5.01 billion for the programme and US$4.03 billion for women specific programs. The budget made significant relief to Middle-class Tax-Payers and this is expected to jump-start consumption.

To encourage investment, the budget proposes to bring in transparency and greater professionalism in Public Sector Banks. Certain govt securities will be open for foreign investors. The budget envisages a US$140 million scheme for Export promotion of Micro, Small & Medium Enterprises (MSMEs) for pharmaceuticals, auto components and other sectors.

The Indian economy has experienced growth due to strong foreign investments and continuous improvement of its business environment. To incentivise investment by Sovereign Wealth Fund of foreign governments, it has been decided to grant 100% tax exemption on interest, dividend and capital gains income on investment made in infrastructure and priority sectors before March 31, 2024 with a minimum lock-in period of 3 years. Government is also considering further opening up of FDI in aviation, media and insurance sectors in consultation with all stakeholders. 100 % FDI will be permitted for insurance intermediaries and local sourcing norms will be eased for FDI in single brand retail sector. International Bullion exchanges will be set up as an additional option for trade by global market participants and specified government securities will be opened fully for non-resident investors. Foreign portfolio investment (FPI) Limit for corporate bonds has been increased to 15%. The budget also proposes setting up of an Investment Clearance Cell to provide end to end facilitation to investors.

India is one of the fastest growing major economies in the world, with its GDP expected to grow at 6.0% - 6.5% in 2020-21. Achieving a jump of 79 positions to 63 in 2019 from 142 in 2014 in World Bank’s Doing Business rankings, economy has seen 15% jump in FDI inflow to US$26.1 billion during 2019-20, led by services and ICT sectors, which was further boosted by US$38.4 billion in remittances from overseas Indians. The country is expected to create around 26.2m new jobs with 12.1m in rural areas and 13.9m in urban areas. Through enhanced expenditure in social services, the country will improve its ranking in Human Development Index. India is committed to implement the Paris Agreement and is also moving forward on the path of SDG implementation.

More about: India