$5-trillion economy distant dream? India slips to 7th spot in global GDP ranking

India now stands seventh in 2018 global GDP (gross domestic product) rankings, as per a World Bank report. In the preceding year, India stood at number five.

The United States, China and Japan secured the first three positions, with a GDP of $20.5 trillion, $13.6 trillion and nearly $5 trillion, respectively.

Germany ($4 trillion), the UK ($2.8 trillion) and France ($2.77 trillion) took the fourth, the fifth and the sixth spots, respectively.

India’s, which had a GDP of $2.73 trillion in 2018, was enjoying a GDP of $2.65 trillion in 2017.

CRISIL had earlier cut India's GDP growth estimate to 6.9 percent from 7.1 percent for FY20. The adjustment came amid weak rainfall in June and slowing global growth, with another reason being sluggish data for the first quarter.

“The crucial question, therefore, is whether a trough is in sight. Given the fiscal constraints, public spending is unlikely to have the heft to pull growth above seven percent. And some of the recent, and much-needed, reforms would pay off only over the medium term. There would, therefore, be some near-term onus on monetary policy to stimulate. But how effective that can be is the big question,” said Dharmakirti Joshi, Chief Economist at CRISIL.

In Budget 2019, the Narendra Modi government said it aims to make India a $5-trillion economy by 2024. However, not every analyst was convinced with the promise. According to them, the target is too ambitious to achieve.

In July, Asian Development Bank said India would be expected to grow "by seven percent in 2019 (FY20) and 7.2 percent in 2020 (FY21), slightly slower than projected in April because the fiscal 2018 outturn fell short," ADB said in its supplement to the Asian Development Outlook 2019.