On the 19th of November 2023, social media was abuzz with reports indicating that India had achieved the status of a $4 trillion economy. However, it’s crucial to note that the country has yet to cross this significant landmark. The viral spread of screenshots displaying an image indicating India’s GDP surpassing $4 trillion led to widespread enthusiasm, with many anticipating India’s growth to the position of the world’s third-largest economy. Despite the hype, there has been no official confirmation or denial of this achievement. The Ministry of Statistics and Programme Implementation appoints the National Statistical Office as the designated authority to release the official GDP estimates of India on a predetermined schedule.
Early Life & Education
The snapshot demonstrating that India’s GDP is more than $4 trillion was supposedly taken from the LiveStream07 YouTube channel. This channel claimed to provide aggregated real-time GDP data from the International Monetary Fund (IMF). However, the IMF revealed to BOOM that this claim is incorrect because they don’t compile GDP figures in real-time. Experts and economists have also raised concerns about the information circulating on social media, highlighting how often the real-time predictions are misleading. Moreover, the delayed availability of data from different sectors makes it nearly impossible to track GDP data for every country in real-time.
“I am surprised how everyone is jumping on a screenshot. India on a rolling basis won’t hit $4 trillion till late 2024-early 2025. This fiscal year (2023-24) India’s nominal GDP is expected to be around Rs 300 [lakh crore], which implies a GDP of about $ 3.65 trillion on present exchange rates,” posted Rahul Bajoria, MD & Head of EM Asia (ex–China) Economics, Barclays, on his personal X account.
Economists emphasised that the only authorised source of statistics is the Union government’s National Statistical Office. These official projections are the basis for all authorities, including international organisations. The initial advance estimates of GDP for the fiscal year 2023-24, incorporating estimates of nominal GDP growth, are anticipated to be available in early January, before the Interim Budget for 2024-25. Following this, the second advance estimates are expected to be released in February, with the first provisional estimates following in May.
The Political Stir
A political controversy erupted as unverified screenshots from a live-tracking GDP feed, allegedly sourced from the International Monetary Fund went viral. Prominent BJP leaders, including Union Ministers, shared this viral screengrab on social media hailing this achievement. The controversy alleges that the news of robust GDP growth is being utilized to shape public perception and confidence, indicating effective economic management by the ruling government.
The Bharatiya Janata Party (BJP) leader Devendra Fadnavis tweeted saying:
“This is what dynamic, visionary leadership looks like! That’s what our #NewIndia progressing beautifully looks like! Congratulations to my fellow Indians as our Nation crosses the $ 4 trillion GDP milestone! More power to you, more respect to you Hon PM @narendramodi ji!.” D Purandeswari, BJP’s Andhra Pradesh president said, “Congratulations BHARAT on becoming a 4 Trillion Dollar Economy! This phenomenal achievement has been made possible by the path breaking reforms introduced and implemented by Prime Minister Shri @narendramodi Ji Government in the last 9.5 years.”
Jal Shakti Minister Gajendra Singh Shekhawat said in a post on X described the milestone as “India’s moment of global glory.” He expressed that the rise of a New India under PM Narendra Modi ji’s leadership is truly unparalleled.
Union Minister of State Arjun Ram Meghwal also referred to the viral screenshot in his post on the social media platform X, describing the accomplishment as “a significant moment in our global presence.” He praised Prime Minister Narendra Modi’s administration for taking the nation “to unprecedented heights.”
“Congratulations As The GDP Touches $4 Trillion For The First Time and Marches Ahead. On the course towards $5 Trillion Economy – Modi Ki Guarantee,” said another Cabinet minister, G Kishan Reddy who is the Union Minister for Culture, Tourism and Development of Northeast Region and also the Telangana BJP president.
Businessman Gautam Adani had also included a note of gratitude and assurance that the nation would rise to the third rank in the world economy within the next two years.
However, on November 20, the opposition party, Congress asserted that prominent Union Ministers from states with upcoming elections, such as Telangana and Rajasthan, had spread “bogus and fake news” about India’s GDP surpassing four trillion dollars, merely to generate headline management and enthusiasm.
“Between 2:45 p.m. and 6:45 p.m. yesterday, when the nation was glued to watching the cricket match, various drumbeaters of the Modi government, including senior Union Ministers from Rajasthan and Telangana, the Deputy Chief Minister of Maharashtra, as well as the Prime Minister’s most favoured businessman, tweeted that yesterday itself India’s GDP had crossed the $4 trillion mark,” said Jairam Ramesh, the Congress general secretary
The Official Growth Figures
As per the Budget numbers, India is expected to reach $3.7 trillion for the current fiscal year (FY24). According to IMF estimates, India’s GDP is expected to reach $4.2 trillion in the upcoming fiscal year (FY25). It would take three more years for India’s economy to overtake Japan as the world’s fourth-largest economy (FY26), and an additional year for India to surpass Germany as the world’s third-largest economy (FY27). It must still grow at an average rate of 9.1%, though, to overtake Germany and Japan as the third and fourth largest economies in the world by 2027 and reach the $5 trillion milestone.
Q2 FY24 GDP Figures
On a positive note, a few days following the $4 trillion milestone controversy, data released by the National Statistical Office (NSO) on 30th November 2023 indicated that India’s GDP grew by 7.6% on an annual basis in the second quarter (July-September), surpassing the predictions of analysts. The previous quarter witnessed growth of 7.8% on an annual basis. According to a median poll undertaken by EconomicsTimes among ten economists, the economy is growing at a rate of 6.7%.
At its October meeting, the Rate-Setting Panel of the Reserve Bank of India (RBI) set the growth estimates at 6.5%. In contrast to the Reserve Bank of India‘s prediction of 6.5%, economists had predicted that the GDP growth rate for the second quarter would be 6.8%. In July-September, India’s GDP grew at a rate of 7.6%, surpassing all estimations, according to figures issued on November 30 by the Ministry of Statistics and Programme Implementation.
The press note released by The Ministry of Statistics and Programme Implementation on the estimates of Gross Domestic Product for the second quarter revealed the following:
Real GDP, or GDP at Constant (2011–12) Prices, is predicted to reach ₹41.74 lakh crore in Q2 2023–24 compared to ₹38.78 lakh crore in Q2 2022–23, indicating a rise of 7.6% versus 6.2% in Q2 2022–23.
GDP at Current Prices, or Nominal GDP, is predicted to reach ₹71.66 lakh crore in Q2 2023–24, a rise from ₹65.67 lakh crore in Q2 2022–23. This is an increase of 9.1% as opposed to 17.2% in Q2 2022–23.
Equity market capitalisation of $4 trillion
The market capitalisation of stocks listed on the BSE surpassed $4 trillion for the first time on November 29, 2023, much ahead of the debate surrounding India’s GDP reaching $4 trillion. This makes India the fifth nation after the United States, China, Japan, and Hong Kong to attain this milestone. On the BSE, the total market capitalisation reached ₹333.29 lakh crore.
The market value of a firm listed on a stock exchange is known as its market cap. In this context, the market capitalisation of all companies registered on one of Asia’s oldest stock exchanges, the Bombay Stock Exchange (BSE), has surpassed $4 trillion. In May 2007, BSE’s listed companies crossed the $1 trillion market valuation threshold. Even though many new businesses joined the exchanges, it took more than ten years to double that. In July 2017, the market cap surpassed $2 trillion, and in May 2021, it exceeded $3 trillion.
India’s share of the global market capitalisation is at 3.61%, a rise from 3.37% at the beginning of the year. The increase in share prices and the IPOs that result in new listings has boosted the market capitalization. Furthermore, India’s market capitalisation is expected to maintain this level or perhaps surpass growth as the country’s GDP continues to rise.
By 2027, India’s nominal GDP in US dollars is anticipated to overtake Japan. By then, the only economies larger than India’s will be that of China and the United States. The economy is projected to grow from its current value of US$3.4 trillion to US$29 trillion in 2047 and US$45 trillion in 2052. Big Bang reforms could unleash efficiencies that would cause India’s economy to surpass that of the US by 2052, according to CLSA.
To conclude, the trajectory of India’s economic milestones, particularly the speculated $4 trillion GDP, has been accompanied by contrasting narratives. Amidst the debates, the official growth figures revealed a robust 7.6% annual GDP growth in Q2 FY24, surpassing the expectations. The stock market, crossing the $4 trillion market capitalisation, added another facet to India’s economic landscape. Moving forward, the complexities of economic projections, political discourses, and market dynamics will continue to influence the path of India’s evolving economic story. Looking ahead, with the market capitalisation exceeding $4 trillion and ambitious growth predictions, India’s economic path remains dynamic. In the coming years, we anticipate significant shifts in global rankings, presenting both challenges and a multitude of opportunities that will shape India’s position on the global economic landscape.
Written by – Saba Godiwala
Edited by – Krati Nitin
*This article was written on 4th December