India has been one of the most notable emerging economies in the world in the last few decades. It currently stands at seventh place with a nominal GDP of $2.72 trillion and it is expected to overtake the United Kingdom in years to come. India’s PM Narendra Modi envisioned a dream of making India a $5 trillion economy by 2024[1]. But achieving that dream for a country with a population of 1.3 billion might be a challenge if the current economic performance is to be considered. Indeed, bitcoin adoption in India could be the key to its economic future.
India’s Current State
If India’s GDP is to reach $5 trillion by 2025, its minimum annual growth rate will need to be greater than 10.8 percent every year. India’s current GDP growth has fallen sharply from 8 percent last year to 5 percent in the second quarter of 2019. Manufacturing growth in India slumped to a 15-month low in August due to lower sales growth, resulting in factories being forced to shut down production.
Another reason for slowing economic growth is India’s rising unemployment rate, which was 8.5 percent in October, its highest in the last three years. Foreign portfolio investors were net sellers of Indian stocks during the July-September quarter, withdrawing over $3.2 billion from Indian capital markets. The Indian central government’s fiscal deficit is projected to widen to about 3.7 percent in FY20, contrary to the plan of keeping it under 3.3 percent.
With all these lower-than-expected results, the Indian government has been taking a series of measures to boost the economy from the supply-side by pushing public capital expenditures, lowering the corporate tax from 35 percent to 25 percent. India’s central bank, the Reserve Bank of India (RBI) has cut its interest rate five times
