India has the potential for "very rapid" economic growth over the next decade which will lift people out of poverty and allow the government to invest in health and education priorities in an "exciting way". This was what Bill Gates, billionaire philanthropist and Microsoft co-founder, stated last Monday. 

Three days later former RBI Governor C Rangarajan has questioned the prudence of the government on reaching the $5 trillion GDP target by 2025 at the present growth rate. He finds it "simply out of question."

It may be underlined that NaMo Govt soon after assuming office for the second term had set a target of taking the economy to $5 trillion over the next 5 years. But since there have been dark clouds gathering all over the economy leading many to question the maintainability of the target.

Southwards movement of the economy is continuing with growth rate slowing from 8.2 percent in FY16 to 6.8 percent FY19. The first quarter growth slipped to a six-year low of 5 per cent, the best forecast for the second quarter is 4.3 percent now. Even RBI has lowered its growth full year forecast by a full 9o bps in two months to 6.1 percent in its October policy review.

India’s economy is about $2.7 trillion and talking about doubling this over the next five years at $5 trillion seems impossible. The required rate of growth to achieve that level is in excess of 9 percent per annum. So the former governor says reaching $ 5 trillion by 2025 is simply out of question".

Statements of Bill Gates and Dr C Rangarajan appear to represent two different perspectives and appear mutually differing, rather mutually conflicting. But the difference of perception casts shadow on India’s economic projection as well.

(By Rakesh Ranjan)