India To Become $6.7 Trillion Economy By 2031: S&P Global
S&P Global, a major financial information and analytics company, has given its support to India’s economic growth potential.
They suggest that India could achieve an average annual growth of 6.7% until March 2031, even in the face of short-term challenges like interest rate increases and a global economic slowdown.
This means India’s economy could expand from $3.4 trillion to $6.7 trillion by 2031 if it maintains this growth trajectory.
Although India achieved a 7.2% GDP growth in the fiscal year 2022-23, S&P Global expects some slowdown due to global economic factors and policy rate hikes by the Reserve Bank of India.
They estimate a growth of 6% in the current fiscal year. The report, titled ‘Look Forward: India’s Money’, is authored by S&P Global’s Chief Economist Paul Gruenwald, along with economists from Crisil and S&P Global Market Intelligence.
The report highlights that India’s goal for the next decade is to shift from uneven economic growth to a more steady and high growth trend.
They suggest that investments in infrastructure and manufacturing by both the government and the private sector will play a key role in achieving this. The peak of this growth is expected around the fiscal year 2025-26.
The report also sees positive impacts from reforms like the Goods and Services Tax (GST) and the Insolvency and Bankruptcy Code. It suggests that while India is moving towards manufacturing, services will continue to play a significant role in the economy.
To sustain this growth in the coming years, the report recommends addressing three key areas: increasing labor participation, particularly among women, and enhancing skills; promoting private investment in manufacturing; and improving external competitiveness through foreign direct investment (FDI).
India’s large domestic market and gradually improving global competitiveness are making it an attractive destination for foreign investment, the report adds.
The S&P Global’s report suggests that despite several global challenges, India’s economic future has great potential, and the Indian government is capable of maintaining a strong growth trajectory over the next decade.