12 July 2024 – The Indian Express

Vision of $5 Trillion Economy in India

• The PMGKY, or Pradhan Mantri Garib Kalyan Anna Yojana,
• A component of the Center’s first COVID-19 relief was PMGKAY.
• The Ministry of Finance is its nodal ministry.

Those who benefit from the National Food Security Act:

• It stipulates that 5 kg of rice or wheat should be given away for free each person each month.
• This is in addition to the 5 kg that ration card holders have previously received at a discounted price.
• For example, AAY (Antyodaya Anna Yojana) families receive 35 kg per month, while Priority Households (PHH) receive 5 kilogramme per month per person.
• Based on information from the 2011 census, there is an 80 crore cap on NFSA beneficiaries and state ration card quotas.
• Initially, the programme also included one kilogramme of pulses; however, this was gradually limited to chana dal only and eventually ended.

Japan’s historical growth trajectory:

• Japan’s economy ranks third globally in terms of GDP.
• Driven by exports and manufacturing, Japan’s economy was the second largest in the world for forty years.
• Following the global financial crisis of 2008, Japan’s populace began to spend less, exports decreased, and government incentives ceased to exist.
• China’s manufacturing boom helped it overtake Japan as the second-largest economy in the world in terms of GDP.
• Japan’s main trading partner is China.
• For the past 14 years, Japan has maintained its third-place status in the global GDP rankings.

The case of India (2021):

• Roughly 41% of the country’s wealth was held by 1% of its inhabitants.
• 3% of its wealth was owned by 50%, according to Oxfam.
• The citizens with limited resources who are financing the envisaged $5 trillion economy include:
• The poorest 50% of the population accounted for about 64% of the Goods and Services Tax (GST) overall.
• The richest ten percent made up 3% of the GST.
• Due to halting digital literacy and questionable educational and skill attainments, labour contribution is neutralised.

Projections from the International Monetary Fund (IMF):

• In terms of US dollars, India’s economy is currently the fifth largest in the world.
• By 2027, it predicts that India’s economy would rank third in the world.
• Among the G20, India has the fastest growth rate, outpacing China’s over the past two years.
• According to historical data from the IMF, it took India sixty years, from 1947 to 2007, to surpass the $1 trillion GDP threshold in 2007.
• India’s GDP grew from nothing to $2 trillion in just seven years in 2014.
• By 2021, it had added an additional $1.2 (one plus two) trillion.
• If India achieves the $5.2 (five point two) trillion target set by the IMF by 2027, it will have added $2 trillion in just six years.

In terms of purchasing power parity (PPP), GDP and per capita GDP:

• It establishes the value of a US dollar in that nation.
• India currently ranks third in the world for GDP measured on a PPP basis, with a GDP of $13 trillion (PPP).
• The largest is China ($33 trillion PPP).
• At $9 (twenty six point nine) trillion, the US is ranked second.
• PPP conversion ratios can differ significantly between nations.
• There may be large differences in the prices of goods and services.
• India’s PPP to dollar conversion ratio is 3.5 (three five), about twice as high as China’s, which is 7 (one point seven).
• For instance, if one US dollar can purchase a hamburger in its native nation, it can also purchase 3.5 hamburgers in India and 1.7 hamburgers in China.
• India has the lowest per capita income among the G20 nations, both in terms of PPP ($9,073) and dollars ($2,601).
• From 1981 to 2016, China’s one-child family policy paid off, increasing per capita GDP to $23,382 PPP.
• At $80,035, the US has the highest GDP per capita.

Direction of Travel:

• The government knows that the wealthiest are putting themselves in a prime position to provide the $5 trillion.
• This will increase the power and influence of affluent India overseas.
• The Minister of State for Finance stated in Parliament the sectors and instruments available to the government to accomplish the goal: “Reduction in corporate tax, GST, insolvency and bankruptcy code, energy transition, digital economy, fintech, Made in India, Start-Up India, and production linked incentives.”
• The required catchphrase “inclusive growth” comes before them.
• The marginalised citizens are not indigenous to these cutting-edge fields or instruments.
• They are unable to take use of the prospects in robotics, fintech, data science, artificial intelligence, or robotics, either now or in the next five years.
• The distribution of the $5 trillion GDP, or the inequality index, is the focus of the race. World Economics created this index, which ranges from 0 to 100.
• A higher value denotes a more equitable community.
• China and Japan both have values greater than 50.
• India, with a $2,400 per capita income, is ranked 149th out of 194 countries in 2022.
• At $34,000, the ordinary Japanese person is thought to be in a better financial situation than the average Chinese person, who makes $13,000.
• despite the fact that China now leads Japan in terms of global GDP.