NITI Aayog member Arvind Virmani on Monday said India is set to become the fourth largest economy in the world by the end of 2025, an assertion which came days after NITI CEO BVR Subrahmanyam claimed India has already overtaken Japan to reach that spot.
Illustration: Dominic Xavier/Rediff
The International Monetary Fund (IMF), in its World Economic Outlook (WEO) report released in April had said that India is expected to be the fourth largest economy in the world with a GDP of $4.19 trillion in 2025, ahead of Japan.
“India is in the process of becoming the fourth largest economy, and I am personally confident that will happen by the end of 2025 because we need (data) of all 12 months GDP to say that, you know, to assert that.
“So to say till then, it remains a forecast,” Virmani told PTI.
Asked to comment on NITI Aayog CEO BVR Subrahmanyam’s remark that India has become the fourth largest economy in the world, the eminent economist said: “So this is a complicated question, and I really do not know what the words anybody has used.
“Perhaps there was some word which was missed or something.”
Citing IMF data, Subrahmanyam, last week, said that the size of the Indian economy today is larger than Japan’s.
“We are the fourth largest economy as I speak.
“We are a $4 trillion economy as I speak,” the NITI Aayog CEO had said.
“It is only the US, China and Germany which are larger than India, and if we stick to what is being planned and what is being thought through, in 2.5-3 years, we will be the third largest economy,” Subrahmanyam had said.
Explaining further, Virmani said, “When we discuss the size of economies publicly, we generally use US dollar current prices.”
Virmani further pointed out that ‘when we compare economy, we generally do it in terms of annual GDP’.
Virmani said IMF in its WEO report released in April gave a precise number, which showed that India’s GDP for the full year 2025, would become higher than that of Japan.
“I would say that I am pretty confident that that will happen, but the exact data will probably not be available till January or February, because we are talking about the whole year,” he observed.
India’s nominal GDP for 2025 (FY26) is expected to be $4.187 trillion marginally more than the likely GDP of Japan which is estimated at $4.186 trillion, the IMF had said.
According to IMF data, India’s per capita income has doubled from $1,438 in 2013-14 to $2,880 in 2025.
The IMF in its WEO report also said the Indian economy is projected to grow at 6.2 per cent in 2025-26, slower than earlier estimated rate of 6.5 per cent, due to escalated trade tensions and global uncertainty.
“For India, the growth outlook is relatively more stable at 6.2 per cent in 2025, supported by private consumption, particularly in rural areas,” the IMF had said.
According to the report, the global growth is projected at 2.8 per cent in 2025, lower by 0.5 percentage points estimated earlier.
In 2026, the global economy is estimated to grow at 3 per cent.
