"...the potential of the country is there and that would, forget $5 trillion, in the next 12 to 15 years we could be on the cusp of becoming a $10 trillion economy," Mehta said while addressing a virtual event organised by the All India Management Association (AIMA).
To achieve this, the country must "dream big, think big and act big", he added.
Speaking on "renewing the economy", Mehta said the country has to reach a virtuous cycle of growth.
"We have to reach a stage, where we get into a virtuous cycle of growth, where investments happen or really it starts with demand. The demand goes up, investment happens, livelihoods get created and then the virtuous cycle starts moving. So, we have to get to that stage," he emphasised.
Talking about the Covid-19 situation in the country, he said a $3 trillion economy is like an Airbus A380 aircraft and it must not be allowed to go into a free fall.
On economic recovery, Mehta said the key issue is determining the appropriate level of interest rate to spur growth.
"Now we have come to a very critical juncture, where the question is how much the interest rate should be brought down to give impetus to the economy.
"Second is how aggressive the government should be with the fiscal deficit. There would be a glide path to bring it down in the future in a very disciplined, open and transparent manner so that it gives confidence to both the investors as well as rating agencies," he said.
Some industries, which are big employers, have been seriously impacted by the pandemic and the question is how to bail them out, Mehta said.
He further said the country has a fantastic opportunity to invest in health infrastructure.
"If you look at beds per thousand, we are anywhere one-fifth or sixth of the more developed nations... Pharma industry is about $41 billion and we have around 3 per cent of the global pharma industry. This is a great opportunity to start looking to solve this problem," he said.
The second thrust should be on agriculture, as 60 per cent of the population lives in rural India and 50 per cent of people are employed in the farm sector, he said.
"I am pleased with the government with the steps which they have taken to reform some of the archaic laws which existed into the country. They are absolutely in the right direction. That is the kind of focus we need to bring here," he added.
He also suggested digitising the entire economy and making data a national asset.
"We have to bring down the cost of capital also by 330 to 400 bps at least. We have to bring down the cost of logistics and make land available," he added.
Talking about the FMCG segment, Mehta said the severity of the lockdown which was faced by urban India did not percolate down to the rural areas.
The harvest has been good this year and the government has also increased allocation to the rural employment guarantee scheme, besides taking steps like distributing foodgrains and direct transfer of money to the needy, he said.
"It has definitely given a boost to rural consumption. Before Covid happened, the rural consumption had slowed down. The rural per capita consumption of FMCG is less than half of the national average. So the runway to grow in rural India is massive and if things are good, then the rural growth rate is anywhere between 1.5X to 1.7X over the urban growth rate.
"It is very visible now that the rural growth rates are higher. The issue for us is the urban growth rate," he added.