New Delhi, April 22
India's fall to the sixth-largest economy is only a "temporary blip" and the gap with higher-ranked economies is easily coverable, said Nilesh Shah MD Kotak Mutual Fund and member PM's economic advisory committee, asserting that the country remains on track to become the world's third-largest economy in the coming years.
Reacting to the latest International Monetary Fund (IMF) data showing India slipping from fourth to sixth position, Shah attributed the change to technical and currency-related factors rather than any structural weakness.
"Two things happened. One, we changed the base year for GDP calculation... Second, rupee depreciated last year by almost 10%. Both these things combined brought our GDP from above $4 trillion to below $4 trillion," he told ANI in an exclusive interview.
He acknowledged the development warrants attention but dismissed concerns of any reversal in growth momentum.
"Is this something which we need to be bothered about? Answer is undoubtedly yes. But should we be worried that now our car is going in reverse? No, there's nothing like that," Shah said.
Highlighting India's long-term trajectory, he pointed out that the country has made significant gains over the past decade.
"We were 10th largest economy in 2014. Today we are 6th largest. It's still a jump of 4 spots in less than 12 years," he noted.
Shah emphasised that the gap between India and higher-ranked economies is not substantial and can be bridged with sustained growth.
"More importantly, what is the gap vis-a-vis number 5, number 4? It's easily coverable. We will grow faster than rest of the world," he said.
Citing global projections, he added that India's rise in the rankings may have been delayed slightly but remains intact.
"Even as per IMF projection, by 2031, we should be third largest economy, which earlier was supposed to happen in 2027 or 28. So, yes, we have taken two, three years of step behind," Shah said.
On the broader economic outlook, Shah maintained that India's growth model, focused on inclusive expansion rather than concentrated industrial dominance, remains appropriate for a large and diverse economy.
"We have to create growth which is not driven by just one company or one entrepreneur. We'll have to create inclusive growth," he said.
Shah also underscored the importance of policy continuity and structural reforms, noting that India's progress from the 10th to the 6th position reflects the right direction of economic policy.
"We are moving in the right direction, which is why we have jumped from 10th to 6th spot, fastest in our history," he added.
According to Shah, with continued focus on growth, innovation, and capital formation, India is well-positioned to regain momentum and climb the global economic rankings.
- ANI
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