India’s Sectoral Growth Patterns and US$ 5 Trillion Trajectory: An Empirical Investigation on Macroeconomic Impact of COVID-19

• Published in: Indian economic journal 2020-09, Vol.68 (3), p.309-322
• Main Authors: Soni, Swapnil, Subrahmanya, M. H. Bala
• Format: Article
• Language: English
• ISSN: 0019-4662; 2631-617X
• DOI: 10.1177/0019466220968064

The productive sectors—agriculture, industry and services—are pillars of growth and enablers to the dream of India’s US$ 5 trillion economic target. The collective growth and contribution of these productive sectors have exhibited dynamic patterns in the history of Indian economy attracting attention of researchers and policy makers. The investigation of the growth trajectory of these productive sectors aligning with US$ 5 trillion GDP objective becomes more important at the challenging time of unprecedented COVID-19 pandemic and subsequent nation-wide lockdown in the economy. This study investigates the economy’s and sectoral growth trajectory considering the disruption caused by pandemic and answers the pertinent question: ‘Will India attain its dream of US$ 5 trillion economy, if yes, when and how?’ The results of empirical analyses reveal that India will join US$ 5 trillion club by 2027–2028, 3 years later than the original target of 2024–2025. This growth trajectory requires that the productive sectors be bolstered consistently by reforms and stimulus and thereby they exhibit recovery post-COVID-19. JEL Codes: A20, C01, C54, E20, O47