(MENAFN- Khaleej Times) Asia's third largest economy would reach its $5 trillion economy target by 2026-27 The IMF, which predicted in April this year that India cannot become a $5 trillion economy until 2028-2029, has reworked its forecast in the World Economic Outlook database. — File photo by Issac John
Published: Wed 18 May 2022, 6:51 PM
The 5G technology will contribute $450 billion to India's economy, Prime Minister Narendra Modi said as he underlined the role of the telecom sector in accelerating the country's economic growth.
“It is estimated that in the coming time, 5G will contribute $450 billion to the Indian economy. This will not only accelerate internet speed but also boost development and employment,” Modi said while addressing the silver jubilee celebrations of the Telecom Regulatory Authority of India on Tuesday.
The prime minister's bullish forecast on economic growth and the booming telecom sector came as the International Monetary Fund revised upward its growth outlook for India, predicting that Asia's third largest economy would reach its $5 trillion economy target by 2026-27, two years earlier than recently forecast.
“By the end of this decade, we will be able to launch 6G services. Our task force is working on it. Our efforts will help our startups to become global champions in the telecom sector and 5G technology,” Modi said.
Modi launched a 5G Test Bed, developed by a multi-institutes collaborative project that included eight institutes led by IIT Madras.
“5G Testbed is an important step towards the country's self-reliance on critical and modern technology in the telecom sector. The 5G technology is also going to bring positive changes in the governance of the country, ease of living and ease of doing business,” the prime minister said.
This facility will boost growth in every sector - agriculture, health, education, infrastructure and logistics, creating vast employment opportunities, Modi noted.
The IMF, which predicted in April this year that India cannot become a $5 trillion economy until 2028-2029, has reworked its forecast in the World Economic Outlook database, according to a report by Swarajya.
As per the latest revision by IMF, India will reach its $5 trillion economy target by 2026-2027 --- two years earlier than they initially predicted. The new forecast also claims that India will become a $5.5 trillion economy in 2027-2028.
The report said that the change in forecast is due to the assumption that the rupee will depreciate to Rs84 against the dollar and not Rs94.
“This turnaround is to the Fund's credit, for it suggests an open-mindedness and willingness to correct its assumptions. This is more in sync with assumptions about growth, inflation differentials between India and the US, and exchange rates,” the report emphasised.
The IMF did not consider the growth of the Indian economy in nominal or real terms and focused primarily on the dollar-rupee exchange rate.
“Anyone who has monitored the behaviour of the rupee's exchange rates in the past two decades will note two things: one, there are years of relative stability and then a year or two of sharp fall, followed again by a period of stability. The current exchange rate fall of the rupee against the dollar is an example of the latter. We can expect stability to return before the year is out,” said the report.
“The IMF has officially taken back its forecast saying India will be a $5 trillion economy only in 2029. Now the IMF revised prediction says India will reach $5 trillion in 2026,” said the report.
The report said the claim that Bangladesh has overtaken India in terms of GDP per capita has also been revised by the IMF. The international financial institution has now claimed that the per capita GDP of India will remain ahead of Bangladesh till 2027.
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