<p>The reform measures announced in the Budget 2021-22 will play a big role in India becoming a $5 trillion economy and beyond, Chief Economic Adviser K V Subramanian said on Friday.</p>.<p>He also said the country's economy is expected to grow at 15.5 per cent in nominal terms in 2021-22 and contract 1-2 per cent depending on what the inflation actually might be for the year ending March 2021.</p>.<p>"The Budget 2021-22 has laid the foundation for the $5 trillion economy... it (reform measures announced in the Budget) will play a big role in India achieving $5 trillion economy target and beyond," he said at a virtual event.</p>.<p>In 2019, Prime Minister Narendra Modi envisioned making India a $5 trillion economy and a global economic powerhouse by 2024-25.</p>.<p>Noting that India's potential rate of growth is 6.5-7.5 per cent, Subramanian said the country must continue to focus on growth.</p>.<p>The CEA said the IMF has projected the country's economic growth even higher than the Economic Survey's growth projection at 11.5 per cent and this is all on real terms.</p>.<p>"So, if we include about 4 per cent inflation, then 15.5 per cent GDP growth can be expected in the nominal term for the coming year (2021-22).</p>.<p>"This year, I think it (GDP growth) might be around (-) 1 to 2 per cent depending on what the inflation actually might be for the year ending March of this year," he said.</p>.<p>Subramanian pointed out that every country in the world is facing lower economic growth because of the Covid-19 pandemic.</p>.<p>"But from India's perspective, in the coming year, whatever growth momentum we have lost, we would recoup that momentum," he asserted.</p>.<p>Replying to a question, the CEA said one public sector insurance company is going to be divested and this company will compete with private sector insurance companies.</p>.<p>He also expressed confidence that the government will achieve next financial's fiscal deficit target of 6.8 per cent. According to Subramanian, India has faced three crises after 1991 -- the Asian crisis(1997), the global financial crisis (2007-08) and the Covid-19 pandemic (2020).</p>.<p>During the global financial crisis, the then Manmohan Singh government increased revenue expenditure and decreased capital expenditure which gave a push to the demand side only and not the supply side, which resulted in high inflation, he said. </p>
<p>The reform measures announced in the Budget 2021-22 will play a big role in India becoming a $5 trillion economy and beyond, Chief Economic Adviser K V Subramanian said on Friday.</p>.<p>He also said the country's economy is expected to grow at 15.5 per cent in nominal terms in 2021-22 and contract 1-2 per cent depending on what the inflation actually might be for the year ending March 2021.</p>.<p>"The Budget 2021-22 has laid the foundation for the $5 trillion economy... it (reform measures announced in the Budget) will play a big role in India achieving $5 trillion economy target and beyond," he said at a virtual event.</p>.<p>In 2019, Prime Minister Narendra Modi envisioned making India a $5 trillion economy and a global economic powerhouse by 2024-25.</p>.<p>Noting that India's potential rate of growth is 6.5-7.5 per cent, Subramanian said the country must continue to focus on growth.</p>.<p>The CEA said the IMF has projected the country's economic growth even higher than the Economic Survey's growth projection at 11.5 per cent and this is all on real terms.</p>.<p>"So, if we include about 4 per cent inflation, then 15.5 per cent GDP growth can be expected in the nominal term for the coming year (2021-22).</p>.<p>"This year, I think it (GDP growth) might be around (-) 1 to 2 per cent depending on what the inflation actually might be for the year ending March of this year," he said.</p>.<p>Subramanian pointed out that every country in the world is facing lower economic growth because of the Covid-19 pandemic.</p>.<p>"But from India's perspective, in the coming year, whatever growth momentum we have lost, we would recoup that momentum," he asserted.</p>.<p>Replying to a question, the CEA said one public sector insurance company is going to be divested and this company will compete with private sector insurance companies.</p>.<p>He also expressed confidence that the government will achieve next financial's fiscal deficit target of 6.8 per cent. According to Subramanian, India has faced three crises after 1991 -- the Asian crisis(1997), the global financial crisis (2007-08) and the Covid-19 pandemic (2020).</p>.<p>During the global financial crisis, the then Manmohan Singh government increased revenue expenditure and decreased capital expenditure which gave a push to the demand side only and not the supply side, which resulted in high inflation, he said. </p>