NEW DELHI — After Prime Minister Narendra Modi, during his Independence Day address to the nation, said the country is on its way to become the third-largest economy with big reforms across sectors, Dr Gita Gopinath, Deputy Managing Director of the International Monetary Fund (IMF), has stated that the country is likely to achieve this feat by 2027.
The country has become the fifth-largest economy in the world, and is set to be among the top three global economic powers soon.
According to Gopinath, India’s growth did much better than expected during the last fiscal year (FY24) as private consumption growth recovered across sectors, especially in the rural economy.
From two-wheeler sales to fast-moving consumer goods (FMCGs), the overall consumption is surging. "With better monsoons come better harvests and agricultural incomes go up," she was quoted as saying in media reports.
According to latest data by the Society of Indian Automobile Manufacturers (SIAM), the total production of passenger vehicles, three-wheelers, two-wheelers and quadricycle reached 24,37,138 units in July. Two-wheeler segment posted a decent growth of 12.5 per cent in July compared to the same month last year.
On the other hand, the FMCG market in India remains resilient despite challenges. According to marketing research firm Kantar Worldpanel, the FMCG sector is expected to register 6.1 per cent yearly growth in FY 2024-25 in the rural market, which was 4.4 per cent last year.
According to the report, volumes in rural market could equal those in the urban market, which is higher at present. The rural FMCG market is more valuable to the industry than before and is generating almost half the volume and value for the sector.
Gopinath also mentioned that the country needs to create millions of additional jobs in the next 5-6 years.
The IMF has raised its economic growth forecast for the country for FY25 to 7 per cent from 6.8 per cent projected in April. According to RBI Governor Shaktikanta Das, if the average growth India recorded over the three years is seen, the average comes to 8.3 per cent. In the current year, they have given a projection of 7.2 per cent growth.