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Executive director at the International Monetary Fund (IMF) Krishnamurthy Subramanian has said that the size of the Indian economy has the potential to touch $55 trillion by 2047 if the growth rate in dollar terms remains at 12 per cent. He also said that inflation targeting since 2016 had helped the country average out the rate of price rise to 5 per cent. Before 2016, the average rate of inflation was 7.5 per cent. 

Subramanian stated that with a real growth of 8 per cent, the nominal growth is expected to be 13 per cent with 5 per cent inflation rate. With rate of depreciation of the Indian currency to be less than 1 per cent vis-a-vis the dollar in the long run, the fundamentals of the economy will start to show up. In this context, he said that the real growth rate of India will be 12 per cent in dollar terms. According to him, then the size of the economy will double every 6 years.

He further said in advanced economies, investments have been saturated where productivity improvement will be the only source of growth. The other cause for the country could grow at eight per cent is due to a greater formalisation of the economy. At present, one-half to two-thirds of the Indian economy is still in the informal sector. Higher formalisation of the economy will lead to higher productivity. But there is still scope for raising productivity of the Indian formal sector as compared to global peers. He added that Entrepreneurship, innovation and private credit creation are the other three key pillars which will help the economy to grow at eight per cent in real terms.