India’s economy is now worth $1 trillion

Top businessmen say this signals "maturing of Indian economy", report Ranju Sarkar and BSS Reddy.

At 8.55 am on Wednesday, the Indian rupee appreciated to below the ‘41 mark’ against the dollar. It turned India into a trillion-dollar economy, the 12th country in the world to achieve the feat. That is Rs 41,000,000,000,000, and the Credit Suisse financial services conglomerate noted the milestone in a report on Thursday.

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But in this time of 9 per cent growth, booming stock markets and ultra-positive economic sentiment, the milestone was hardly a surprise. Kumarmangalam Birla, chairman of the Aditya Birla Group, said a trillion-dollar economy was an “inevitable landmark”. Pharma major Ranbaxy’s chief executive officer and MD Malvinder Mohan Singh agreed: “It signals the maturing of the Indian economy, and indicates that most of its contributing engines are beginning to fire.”

The Reserve Bank of India had said on Monday that the economy grew at 9.2 per cent in 2006-07 as against 9 per cent in the previous fiscal. The growth was fuelled by services and manufacturing, which are expected to continue recording double-digit growth. “We are nation of 1 billion people, a $1 trillion economy, a $1,000 per capita income. That’s the way we should think. We are not far from it,” said Ajit Ranade, chief economist, Aditya Birla Group.

“Psychologically, it keeps India in a different league in terms of investor confidence,” said Andrew Holland, MD of DSP Merrill Lynch Securities. Fundamentally, the milestone does not change anything, but the likely hoopla will add to investor sentiment, the Credit Suisse report said. But it added a caveat. It is wrong to take quarter-end GDP and interim exchange rates to calculate the worth of an economy in a foreign currency, warned Credit Suisse.