The rating agency has said that there remains uncertainty in controlling Corona. Therefore, its challenges will be further. However, infra can improve the situation to some extent. It will be important to see at what rate GDP increases.
GDP is expected to fall by 8% this year. In the coming years, it can grow at the rate of 7-8%, if the economy grows at the rate of 11.6% per annum, then it will have to wait till 2027 to go to 500 lakh crores. According to the report, the growth rate of 11.6% is quite high It is very difficult to do. In this case it may take longer
Prime Minister Narendra Modi may have to wait for a few more years to achieve the $ 5 trillion (Rs 500 lakh crore) economy. This is because the country’s growth rate may remain within a limited range for the next few years. However, Corona has also made some impact on this. Also, it will happen for all sorts of other reasons.
GDP growth expected to be much lower at 11.6%
Rating agency CARE has said in a report that if the country’s gross domestic product (GDP) grows at an average of 11.6% annually for the next 6 years, it may take 6 to 7 years to become a $ 5 trillion economy. This means that the country’s GDP can be 5 trillion dollars by 2026-27. However, the growth rate of 11.6% is also highly optimistic. It is believed that for the next few years, this growth rate will remain within the range of 7-8%. In such a situation, we have to wait for a long time.
Corona has affected
Actually, Corona has adversely affected the economic activities and what will be its effect in the coming time, it will also have to be seen. It is not yet clear what the trend of Corona will be. When will it end and what will the final effect be. In such a situation, there will still be a lot of waiting for GDP growth.
The economy is still under pressure
According to the report, the Indian economy is still under pressure. There are many factors like political stability, progressive leadership in the country which will impact GDP. On the other hand, however, it is anticipated that the economy may grow at 8% in the coming years. CARE ratings estimate that GDP may fall by 8% in the current financial year.
Need for infra investment in the country
According to the report, it is estimated that India’s economy will depend on how the country is managing infra’s investment. The rating agency has said that new investment in the country is necessary to build a $ 5 trillion economy. If this happens, an economy of 500 lakh crore rupees can be thought of in the next 7 years. That is, it is possible by 2027.
Central government and state government should invest together on infra
The rating agency has said that some part of this investment will have to be borne by the Central Government and some part to the State Governments. This will be possible only with the efforts of both. In addition, financial sectors like banks, debt, stock market and foreign investment will also be required. According to the report, in recent years the banking sector of the country has been struggling with bad loans (NPAs). In this case, the investment potential of Infra by this sector is quite low.
Banking sector under pressure from provisioning
The banking sector is still buried in provisioning of loans. Given the potential losses, the capital base of the banks is being reduced by the provisioning being done. The report states that banks will not spend too much on infra. Care Ratings says the market can play an important role in this.
The agency has said that there remains uncertainty in controlling Corona. Therefore, its challenges will be further. However, the infra can improve the situation to some extent.