New Delhi : There is a possibility that India will become the world's fourth largest economy in 2025, surpassing Japan. With more opportunities for private sector investment and a larger share in world trade, the country can become a $4 trillion economy. This thinking seems to be a bit too optimistic because the growth rate has been below 10 percent for the last two consecutive years and it is likely to remain below 10 percent in the next budget also. This will affect household income and employment opportunities.
Despite this, improvement in the economy is expected because after assuming the post of US President, Trump can impose heavy tariffs on Canada, Mexico and China which will benefit India in foreign trade. The economy will grow only when exports and private investment increase.
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A lot also depends on economic conditions
A lot also depends on foreign and domestic economic conditions. The rupee is becoming weaker against the dollar. There will be pressure on the Reserve Bank of India to reduce interest rates. High interest rates are a deterrent for exporters Commerce and Finance ministries are working together to help micro, small and medium industries. Direct tax collection has increased by 16.45 percent to Rs 15.82 crore. Monetary policy may have to be changed. It is expected that the Eighth Pay Commission will come which will increase the salary of government and semi-government employees.
The Center would like to take a decision in this regard only in 2026. The report of the 16th Finance Commission will come by the end of next year. This may change the financial relations between the Center and the states. States are demanding more share in the fund. As far as production related incentive scheme is concerned. Rs 11,535 crore was paid under this in 2021-22 and 2023-24. Of the total 13 industry sectors, only mobile phone sector got one third of this amount. There is also a huge potential in the field of semiconductor chip manufacturing in which China is currently playing a leading role in the world.
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