New Delhi.. International Monetary Fund (IMF) Executive Director and former Chief Economic Adviser to India KV Subramanian on Thursday said that India can become a USD 55 trillion economy by 2047 if it maintains an annual growth rate of 8 per cent.

The economy will become 55 trillion dollars by 2047

Speaking to news agency ANI, Subramanian said, "I am forecasting that if India can grow at 8 per cent per annum from now till 2047, when we celebrate the 100th year of Independence, it can become a USD 55 trillion economy." He admitted that this target seems ambitious compared to other forecasts, such as Ernst & Young's USD 26 trillion forecast for 2047 or Goldman Sachs' estimate of USD 50 trillion by 2075.

He said if we take into account all the macroeconomic diversifications including inflation-targeting by the government since 2016, the resulting inflation has come down by at least 2 percentage points on an average. This represents a significantly smaller depreciation in the value of the rupee against the dollar and when added to the power of compounding, the forecast of US$26 trillion is an underestimate.

This is how you will touch the figure 

On the USD 55 trillion target, Subramanian explained that if we assume a real growth of 8 per cent with 5 per cent inflation, which has been the case since 2016 after the inflation targeting regime was introduced. This is 13 per cent, if the currency depreciates by 1 per cent due to a much lower rate of inflation, the currency depreciation will be much less than the historical average of about 3 per cent. Then the growth rate will be 12 per cent.

Will compete with America and China 

He also said that the two economies ahead of India in 2047 will be the US and China. India's per capita income will be US$ 40,000. Subramanian stressed that with a growth rate of 8 percent and controlled inflation, India can achieve the target of a $55 trillion economy by 2047.