India is on track to become the third-largest economy by fiscal 2030-31, driven by a robust projected annual growth rate of 6.7, the credit rating agency S&P Global said in its report named India Forward Emerging Perspectives.
Along with its projections, the credit rating agency suggested some measures to push the growth of the economy.
In order to maintain the growth momentum, the report added that the continued reforms are crucial to improving business transactions and logistics, boosting private sector investment, and reducing reliance on public capital.
The credit rating agency anticipated that the Indian equity market will stay dynamic and competitive due to strong growth prospects and better regulation.
It added that the foreign inflows into Indian government bonds have surged since the country joined major emerging market indexes, which is anticipated to grow.
Going further, the rating agency suggested that India must develop infrastructure and geopolitical strategies, particularly regarding its extensive coastline, to maximise trade benefits.
It further added in its suggestion that a strong port infrastructure is required to match rising exports and bulk commodities imports because about 90 per cent of India’s trade is maritime.
The report also pointed out the rising domestic energy demands, adding that the country needs to develop sustainable technologies, including renewables and low-emission fuels, balancing energy security with its energy transition plans.
“Agriculture will rely on advanced technologies and new policies to improve infrastructure and productivity. The need is to address critical infrastructure issues such as irrigation, storage, and supply distribution to ensure food security and economic stability,” the report added.
The credit rating agency suggested that the use of Al will boost economic growth of the economy, adding it will bring opportunities for public-private partnerships to replicate the success of India’s digital infrastructure.
India’s GDP grew by an impressive 8.2 per cent during the financial year 2023-24, continuing to be the fastest-growing major economy. The economy grew by 7.2 per cent in 2022-23 and 8.7 per cent in 2021-22, according to official data.
Many global rating agencies and multilateral organisations have also revised their growth forecasts for India upward. In July, the International Monetary Fund (IMF) raised India’s growth projections for 2024 from 6.8 per cent to 7 per cent, reinforcing the country’s status as the fastest-growing economy among emerging markets and developing economies.
The IMF had earlier projected a growth rate of 6.5 per cent for 2024, revising it to 6.8 per cent and now 7 per cent. It had attributed robustness and strength in domestic demand and a rising working-age population behind its growth projections.