$5 trillion economy target postponed to 2026-27: Government

High inflation, weakening of the Chinese economy and the Russia-Ukraine war are weighing down the world economy. Amid global headwinds, top government officials briefed the Parliamentary panel on India's roadmap for a $5 trillion dollar economy after the latter on Monday sought views regarding the same from the Finance Ministry and NITI Aayog.

Sources said the government informed that real GDP growth is expected to be between 6.5 percent and 7 percent in FY23, inflation is to enter tolerance band of 2-6 percent by the fourth quarter of FY23. Meanwhile, the urban unemployment rate, which is at 7.6 percent, would fall further by the end of this fiscal and private capex cycle and could commence in FY24.

The timeline for India becoming a $5 trillion dollar economy has to be postponed because India has lost two years of growth. The $5 trillion dollar target can be achieved by 2026-27. For this, 6.5 percent annual growth rate is needed and inflation should be below 6 percent and US inflation closer to 3 percent.