GDP slump will hit $5 tn target, warns NITI Aayog

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News:According to NITI Aayog,the road to a $5 trillion economy by 2025 is beset with many speed-breakers.

Facts:

NITI Aayog on $5 trillion economy by 2025:

  • Niti Aayog said that the nominal GDP growth which is a measure of growth without accounting for inflation has to be at least 12.4% on average if the target of $5 trillion economy by 2025 has to be reached.
  • However,the current rate was a mere 8% in the first quarter of the current financial year.
  • The domestic investment and consumption which are the only dependable drivers for revival of the economy has slowed down due to real estate sector.
  • The slowdown in the domestic market is also because of limited availability of capital with the banks which are tied down due to high non-performing assets in heavy industry and infrastructure.
  • In the power sector, there is a high cross-subsidisation in favour of residential tariff leading to very high industrial tariffs.The electric power transmission and distribution(T&D) losses in India stand at 19%, higher than that of Bangladesh and Vietnam.

Additional information:

About NITI Aayog:

  • The NITI Aayog was formed via a resolution of the Union Cabinet on January 1,2015.
  • It is the premier policy ‘Think Tank’ of the Government of India providing both directional and policy inputs.It had replaced planning commission as the premier think tank.
  • The NITI Aayog has been mandated with fostering cooperative federalism through structured support initiatives and mechanisms with the States on a continuous basis recognizing that strong States make a strong nation.