India is set to become a $5 trillion economy

India will become a 5 trillion dollar economy because of its sustained 8-9% growth. With this, India would become the third-largest economy in the world. India’s GDP in 2021 was estimated at 3.12 trillion dollars compared to 2 trillion dollars in 2014. The increased investment scenario in the country and the startup boom has led to a significant increase in the GDP, and a more remarkable rise is expected in the upcoming years.

1)Agriculture

Agriculture was once the largest contributor to India’s revenue and GDP. It fell to 18% in 2020. Our country is the second-largest producer of fruit and the biggest producer and exporter of lemons, bananas, and mangoes. The export of fruits and agriculture-based products contributes to a good part of the GDP. The best example of this is AMUL, a cooperative which became the most significant player in the dairy industry. We need to make it efficient to get a better yield from our agriculture. The irrigation facilities are not good in rural areas, and farmers are entirely dependent on monsoons to irrigate their crops. The lack of adequate storage facilities also increases the risk of spoilage and rotten goods.

2)Industrial Production

Large scale industries are being set up in the country to increase the output of goods. The make in India scheme also aims to increase domestic production. This would reduce our dependence on foreign countries and provide more goods to export. The increased exports and increased production boost our economy directly. The make in India scheme has played a significant role in growing our GDP from 2 trillion dollars in 2014 to 3.2 trillion dollars. It is also expected to play a similar role in further growth. India expects to reach a GDP of 5 trillion dollars by 2025. Chemical industries are a massive contributor to the sector. India exports large amounts of pharmaceuticals, tools, metals, and raw materials for other industries. The mining of gems, precious metals, and stones also contributes a lot to the growing GDP of the country.

3)Services

Initially, agriculture was the most significant contributor to the country’s GDP. With the rise of urbanisation and the increase in working people, the service industry has increased to about 55% of the GDP. The increasing literacy and easy availability of skilled and educated people have helped the service industry grow and expand. The services sector is so big that it can be classified further-

1)IT and Business

India has enormous working capital. Skilled workers are readily available in almost all parts of the country. India has emerged as a significant hub for IT companies like Google, Facebook, and Microsoft. The emergence of telemarketing and BPOs has become a big thing in India. BPOs and call centres employ many people in India and provide an excellent boost to the 3.2 trillion dollars Indian economy. IT companies have increased their contribution to the GDP significantly. It has risen from 1.2% in 1998 to 8% in 2018. India’s digital skill force accounts for 75% of the world. Out of the expected 5 trillion economy, about 1 trillion is expected to arrive from digital services.

2)Retail and other services

India has the second-largest population in the world. Such a large population consumes a large amount of stuff, resulting in the retail of many goods. The retail sector of India is vast. The retail of apparel, electronics, and various other goods forms a large chunk of the industry. Companies like Flipkart and Amazon have built a significant business by providing retailers with a national marketplace. A big part of the services industry consists of the travel and tourism industry. Many foreigners come to India to see the vibrant culture. In 2018, tourism generated 28.525 billion dollars.

The services sector has immense potential to help India become a 5 trillion dollar economy and be a major economic powerhouse globally.

Conclusion

India’s GDP is growing at a fast rate of 8-9% and is expected to reach 5 trillion dollars by 2025. Agriculture and services are the most significant contributors to the country’s GDP. The ready and cheap availability of skilled workers has led to a boom in the services industry requiring capable people. Mining and export of gemstones and precious metals also contribute to growing the country’s GDP. Government initiatives like Make in India and the introduction of a uniform tax system have helped the GDP grow even more.