Gear up for the $2-trillion economy
With the Union Budget projecting gross domestic product (GDP) to be R89,80,860 crores in 2011-12, the size of India’s economy is now poised to touch $2 trillion in the year. If one assumes the current exchange rate of R45 per US dollar to hold in 2011-12, the size of the Indian economy would be $1,996 billion at dollar rates.
But the Budget estimate, which assumes a 14% growth in GDP at market prices, is likely to be an underestimate. If one assumes a 9% GDP growth, as estimated last month by the C Rangarajan-led Prime Minister’s Economic Advisory Council (PMEAC) and earlier by the World Bank, and assume an inflation rate of around 7%, GDP at market prices is more likely to grow at 16%, which would ensure that the size of India’s GDP would be R91,38,419 crore or $2,031 billion in 2011-12. In fact, the PMEAC, in its Review