NEW DELHI: India just became a trillion-dollar economy. And with that it moved into the elite club of 10 economic powerhouses that enjoy this distinction.

This is not expected to be a statistical blip, even though India crossed the trillion-dollar threshold as a result of the US dollar slipping below Rs 41 on Wednesday. India's gross domestic product (GDP) at market prices is officially estimated to be just over Rs 41,00,000 crore for 2006-07 and that, on current exchange rates, translates into a little more than $1 trillion.

Considering that, as recently as in 2000-01, India's GDP was under $500 billion, this means it has more than doubled in the last six years. Successive years of 8-9% growth have obviously helped, but ironically so has the fact that inflation has been relatively high, which means the growth in nominal GDP is much more than in real terms.

The recent strengthening of the rupee against the dollar has provided the final push to take the economy beyond the trillion-dollar mark. So, is it just a temporary statistical blip? Perhaps not.

Even if the economy grows by as little as 5% in the current year and inflation stays at around 5%, the country's GDP for 2007-08 would be of the order of Rs 45,00,000 crore. So, even if the exchange rate were to move back to around Rs 45 to the dollar,we would still end the year with a trillion-dollar economy.

India is already the 10th largest economy in the world in nominal dollar terms and this development means that all of the 10 biggies will be over a trillion dollars in size, the US leading the list with over $12 trillion as its GDP.

In purchasing power parity (PPP) terms - which converts rupees to dollars on the basis of what the two currencies can actually buy in their respective economies rather than on what the nominal exchange rate is — India has been for some time the fourth-largest economy in the world behind the US, China and Japan and its size is closer to $4 trillion.

In fact, given the much faster pace at which India is growing compared with Japan, it should be the third-largest economy in PPP terms by the end of this year. It isn't just at home, however, that India is counting in trillions these days. According to the report of the high-powered committee on making Mumbai an international financial hub, Non-Resident Indians (NRIs) are estimated to own over $1 trillion.

The report says that the 20-million strong NRI community has an estimated financial wealth of over $500 billion. Factor in other assets like real estate, gold and art and the total estimated wealth of the NRI community, the report says, is over $1 trillion. India does seem poised, doesn't it?

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