India Targets 8% Yearly Growth to Rank as Third Largest Economy by 2030

Veteran industry leader A M Naik emphasised on Wednesday that India must achieve an annual growth rate of 8% to become the third-largest economy by 2030. "If you want to be the third largest by 2030, then you need an 8 per cent growth," the L&T Chairman Emeritus stated to reporters.

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Current Economic Standing

India currently holds the position of the fifth-largest economy globally, with a GDP exceeding USD 3 trillion. It is widely anticipated that India will surpass Japan and Germany to secure the third spot. The country experienced an 8.2% growth rate in FY24, maintaining an average yearly growth of over 8% for the past three years.

However, projections indicate that GDP growth may decelerate to around 7% in FY25 and potentially slow further due to a larger economic base. "Our expectation is that the country should grow at 8 per cent. Broadly, if you really want to get to the third largest economy less than 8 per cent growth will find it difficult to reach there," Naik remarked.

Policy Continuity and Government Stability

L&T Chairman S N Subrahmanyan expressed optimism about policy continuity, noting that the same government has been re-elected with a different mandate. He highlighted that key ministries remain under the same leadership, which ensures stability in policy implementation. "It is same govt re-elected with a different kind of a mandate," he said when asked about potential challenges faced by a coalition government.

Subrahmanyan also mentioned that ongoing infrastructure spending and the creation of new growth avenues would persist under the current administration. "The policies will continue, the infrastructure spending will continue and the ability to create more avenues for growth etc. will be there. It's a very good feeling to have," he added.

Challenges Ahead

Despite these positive sentiments, Naik refrained from commenting on specific policy changes needed to meet these ambitious growth targets. His long association with L&T Group, spanning over six decades, lends significant weight to his insights on economic matters.

India's path to becoming the third-largest economy involves overcoming several hurdles, including sustaining high growth rates and implementing effective policies. The government's ability to maintain policy continuity and focus on infrastructure development will be crucial in achieving these goals.

India's economic trajectory remains promising, but consistent efforts are required to maintain momentum and realise its potential as a global economic powerhouse by 2030.