WHY IN NEWS
At the 10th Governing Council Meeting of NITI Aayog, it was announced that India has overtaken Japan to become the world’s 4th largest economy, with its GDP surpassing USD 4 trillion.
DETAILS
Key Highlights
- India now ranks 4th in the world in terms of nominal GDP, overtaking Japan.
- According to the IMF’s 2025 World Economic Outlook Report:
- India’s GDP: USD 4.187 trillion
- Japan’s GDP: USD 4.186 trillion
Future Projections
- India is the fastest-growing major economy in the world.
- The only major economy projected to grow above 6% annually over the next two years.
- India’s GDP is expected to reach USD 5.58 trillion by 2028, surpassing Germany to become the 3rd largest economy globally.
ABOUT NITI AAYOG
| Aspect | Details |
|---|---|
| Established | 1st January 2015 |
| Predecessor | Planning Commission of India |
| Purpose | To serve as the Government’s policy think tank for sustainable and inclusive development. |
| Approach | Cooperative federalism and bottom-up planning |
| Chairperson | Prime Minister of India |
| Vice-Chairperson | Appointed by the Prime Minister |
| Governing Council | Includes Chief Ministers of all states and Lt. Governors of Union Territories |
SIGNIFICANCE OF INDIA’S GDP RANKING
| Indicator | Significance |
|---|---|
| Economic Confidence | Reflects strong macroeconomic fundamentals and reforms. |
| Global Influence | Enhances India’s voice in international platforms like G20, IMF, and WTO. |
| Investment Attraction | Higher investor confidence and potential for increased FDI. |
| Development Prospects | Greater fiscal space for infrastructure, health, and education spending. |
PRELIMS PRACTICE QUESTIONS
- India recently overtook which country to become the world’s 4th largest economy by nominal GDP?
a) Germany
b) Japan
c) UK
d) France
Answer: b) Japan - What is the primary goal of NITI Aayog?
a) Implementing Five-Year Plans
b) Serving as a think tank for policy formulation
c) Regulating public sector units
d) Managing financial audits
Answer: b) Serving as a think tank for policy formulation - Who chairs the Governing Council of NITI Aayog?
a) Vice President of India
b) President of India
c) Prime Minister of India
d) Finance Minister
Answer: c) Prime Minister of India
MAINS QUESTION
Q. India has emerged as the fourth-largest economy in the world. Discuss the structural strengths behind this growth and the role of institutions like NITI Aayog in sustaining it.
