2022, But Global Headwinds Remain A Worry Investors have been on a roller-coas ide for the last two months as the global headwinds Intensified. with oll prices faring up, the Sensex had almost given away is gains ofthis year; the rupee was inching towards Rs.75 a dolla andthe current account deficit (CAD) has widened to an alarming 25%, ‘This in the backdrop of exacerbating Sino-US trade war and fight of capital tothe US and other safe haven assets due to the hardening of US bond yields. Amid the dark global clouds, India's ‘gross domestic product (GDP) growth came a stellar 8.2% for the first quarter ofthis fiscal, ‘prompting Prime Minister Narendra Modi to advance the government's target date of doubling the Indian economy to $5 tilion by 2022 from the earlier 2025. “The Indian economy will grow at over 8% rate with massive employment generation being seen in 1 and etal sectors, Macroeconomic fundamentals ofthe economy ae strong,” sad the PM after the GDP numbers were out \While the long-term trend i dificult to predic, Indias showing @ positive upward trend, The country’s GOP has grown an average 7.3% annually over the last decade. Comparatively, the world’s second-largest economy, China, reported a 6.7% growth for the ‘quarter ended June 18 and an average of 13% over the last decade, but the trend is declining. Ina’ $2.6 trilion economy surpassed France’ inthe year 2017 and became the world's sixth largest, and wil soon be fifth behind the Unites Kingdom ‘The Suit Target “The Sif Target Currently, India's gross value added s $1.8 tilion, GOP at constant prices $2 tlion, and GDP at current price is $25 tilion. The World Bank expects India’s GDP to grow at 7.3% this ical, while the Reserve Bank of India (RB pogsit at 7.4%. IFtngia continues to grow atthe current rate of about 7.5%, a back-f-the-envelope calculation shows thatthe GDP will reach $5 tilfon in 2027, or about na decade. I the GDP growth cate isthe country needs to grow at 14.2% annually. No country barring China has had high growth for a continuously long period. Japan, South Korea or ‘miracle countries of South East Asa too have not achieved double-digt growth for over decades. ‘They achieved at best 8% to 9%. ‘So how would the scenarlo play out for India? ‘The Potential [Achieving such high growth wil require exceptional structural changes in ll sectors ofthe economy, toexperts. Inga is expected to be a $6 trilion economy - the third largest inthe word -In the next 10 years, ‘majorly helped by dgtsation, according to global frm Morgan Stanley, which sees digitisation drive providing a boost of 50-75 bass points to GDP growth inthe coming decade, “We estimate that digtisation wil provide a boost of 50-75 basis points to GDP growth and forecast ‘that india wil grow to $6 trllon economy and achieve an upper-middle Income status by 2026-27, Itsald, It expects India's real and nominal GOP growth to compound annually by 7.1% and 11.2%, respectively over the coming decade. [Apart from some short-term teething problems including implementation of goods and services tax (Gs), theres scope for visible shifts in economic actvty starting this year, which would eventually lead India tobe the top five equity markets inthe world witha market captalization of $6.1 trilion and the third-largest listed financial services sector around the globe with a market cap of $1.8 trilion by 2027, said, India’s consumer sector is als likely to add about $1.5 trillion over the next te years. projects annual gross foreign direct investment inflows amounting to $120 billion by 2027, almost double the current 12-month trailing run rate of $64 billion. “The Government Pian ‘Te governments looking to reach the $5 tilon target through manufacturing and agriculture sectors, which it expects to contribute $1 tllon each, and new-age sectors. Its aiming to reorient policy focus in agriculture from being production centric to becoming income- centec ast aims to double farmers income by the year 2022.The government is coming up with a new industrial policy this year with a dual focus on modernizing esting businesses and getting new and futuristic businesses into the ecanomy, for which 12 champion servic sectors have been identified for systematic promotion. Its heavily banking on the 20,000 start-ups registered with the Department of Industrial Promotion and Planning. ‘Over the next 10 years, transactions worth more than $100 bill ae targeted on GeM, the National Procurement Portal Under its new telecom poli, the government expects to attract $100 billion in investments and {generate approximately four milion jobs nthe telecom sector alone, ‘An holistic stratogy is being developed to tap int the potential ofthe Indian logistics sector to forge better linkages between the manufacturing sector and the global supply chains The Taskforces The commerce and industry ministry has set up taskforces to chalk out a roadmap forthe use of big data and artifical intelligence in government processes and to understand the countrys reaction to the changing trade dynamics, The taskforce working on the deployment of new-age technologies will not only work towards Putting big data into use but also towards automation and artifical intelligence (A) in government functioning thereby streamlining the country's data dashboards and mainstream the National eGovernance Plan. The second team will dicuss how to achieve the $5 teilion target by diversifying resources towards big data, automation and artificial inteligence t wil focus on the roe private business enterprises would play in developing new business models that would accentuate the growth ofthe Indian economy, ‘The third taskforce looking into trade dynamics is unlikely to touch multiateral and fre trade arrangements. The three committees willelp create inventive plans to direct the nation forthe fourth industrial revolution, which s about the joining of path-breaking edge computerization, sensors, distributed computing, 30 printing, PC-fuelled procedures, savvy caleulaions and Internet of things.