India’s GDP outlook shines in a decade amid government’s development-centric policy

A recently released International Monetary Fund (IMF) data showed India doubling its GDP (Gross Domestic Product) in the last 10 years with a growth rate of 105 per cent, marking a significant rise in the South Asian giant’s economy and predicting a brighter story of progress for a nation that experts believe will overtake major economies in the coming years.

The data showed India overtaking advanced economies in its growth trajectory during the past decade.

The economic expansion assumes significance since it is now positioning itself ahead of the traditional powerhouses.

Overtaking major economies, the IMF data claimed India grew from $2.1 trillion in 2015 to $4.3 trillion in 2025.

India cruised ahead of the USA and neighbouring China whose GDPs grew by 66 per cent and 44 per cent, respectively, in the same period.

Establishing its dominance, India is now the fifth-largest economy in the world in terms of GDP, just behind the United States ($30.3 trillion), China ($19.5 trillion), Germany ($4.9 trillion) and Japan ($4.4 trillion).

As per IMF data, India may soon overtake Japan with the country’s GDP growing nil in the past decade.

During the same period, the United Kingdom’s GDP grew by 28 percent and France marked a rise of 38 percent, struggling to match India’s bright story of progress.

The growth coincided with Indian PM Narendra Modi’s first two tenures as the Prime Minister of the world’s largest democracy.

With an eye on Viksit Bharat 2047 (Developed India 20247), the data gives a boost to the government’s progressive approach in advancing the economy and framing policies that can benefit the country.

Prudent Policies

Last month, the IMF’s Executive Board appreciated India’s ‘prudent macroeconomic policies and reforms’, which have contributed to making the country’s economy resilient.

The IMF Directors stressed that in the face of headwinds from geoeconomic fragmentation and slower domestic demand, continued appropriate policies remain essential to maintain macroeconomic stability.

“India’s strong economic performance provides an opportunity to advance critical and challenging structural reforms to realize India’s ambition of becoming an advanced economy by 2047,” read the IMF statement.

Directors commended the authorities’ commitment to fiscal prudence and welcomed the adoption of a debt target as the medium-term fiscal anchor, which has enhanced transparency and accountability. Given significant development and social needs, Directors recommended continued, well-calibrated fiscal consolidation over the medium term to rebuild buffers, ease debt service, and reduce debt.

They suggested a greater focus on domestic revenue mobilization, which together with current expenditure rationalization, such as better targeting of subsidies, can create space for growth-enhancing expenditure on infrastructure and health.

Notwithstanding fiscal disparities across states, Directors also broadly agreed that a more holistic fiscal framework that includes state and central government, as well as a more detailed fiscal deficit path with sufficient flexibility, could be used as an operational guide.

Directors welcomed the Reserve Bank of India’s well-calibrated monetary policy with inflation remaining within the target band.

High-quality jobs

Directors emphasized that comprehensive structural reforms are crucial to create high-quality jobs, invigorate investment, and unleash higher potential growth.

The IMF Directors said efforts should focus on implementing labour market reforms, strengthening human capital, and supporting greater participation of women in the labour force.

In a major boost for the country, the Directors commended India’s significant progress in emission intensity reduction and renewable energy deployment and agreed that a balanced climate policy framework, alongside greater access to concessional financing and technology, would be key to achieving net zero emissions by 2070.

The growth trajectory of India is expected to maintain a sharp momentum and this is evident from IMF’s projection which says real GDP is likely to grow at 6.5 percent in 2024/25 and 2025/26.

Self-reliance

In a column published recently in The Hindu newspaper, Professor V. Balakista Reddy pointed to the country’s rapid industrialisation and policy shifts toward self-reliance as the factors behind driving the growth.

“The government has implemented a series of initiatives, including the ‘Make in India’ campaign, aimed at strengthening domestic manufacturing capabilities,” the professor said.

He said India’s Production Linked Incentive schemes have further incentivised manufacturing across various sectors such as electronics, automobiles, pharmaceuticals, and renewable energy.

A stable government has driven forward the country’s economic stability with Narendra Modi coming to power for a third term, India can expect more progressive policies to be implemented in the coming years that can further cement the nation’s position of transforming from a developing to a developed nation by 2047.