India @ 100 and the Significance of Top Six States

K.R. Shanmugam and Mathew Koshy Odasseril ()
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Mathew Koshy Odasseril: Research scholar, Madras School of Economics, Gandhi Mandapam Road, Chennai

Working Papers from Madras School of Economics,Chennai,India

Abstract: India has a goal of achieving a US$ 7 trillion economy in 2030 and subsequently a developed nation status by 2047. While some studies/reports have explored the possibilities of reaching these targets based on assumptions recording the growth rate, inflation etc., this study is an attempt to forecast the future growth of the Indian economy till 2047-48, using the Markov Switching model and real GDP growth data from 1993-94 to 2022-23 and verify when these goals will be achieved. Since the economic outcomes are highly heterogeneous across the Indian States and there are indications of divergence in economic growth, it also estimates and predicts the future growth prospects of the top six states to see how much these top states contributes to achieve the targets. The findings suggest that India will achieve the US$ 7 trillion target by 2032-33 and the per capita income level of developed nation by 2046-47, assuming 4.5 percent inflation and 2 percent depreciation of exchange rate. Tamil Nadu, Karnataka and Gujarat are expected to reach per capita income mark of developed nation by 2037-38, Maharashtra is expected to reach in 2040-41. West Bengal will reach this target by 2047-48, while Uttar Pradesh has to go a long way to reach this ambitious target.

Keywords: Indian economy; Indian States; Markov Switching Regression; GDP/GSDP forecasts (search for similar items in EconPapers)
JEL-codes: C34 E17 E66 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2024-07
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