According to the S&P Global’s inaugural edition of the report titled “India Forward: Emerging Perspectives” released on 19th September, 2024, India is on track to become the 3rd largest economy in the world and transition to the Upper-Middle-Income(UMI) category by Financial Year 2030-31 (FY31), driven by a projected annual growth rate of 6.7%.
- The report noted that India’s Gross Domestic Product (GDP) grew by an impressive 8.2% in FY24 and also expects to grow at 6.8% in FY25.
- However, it suggested that sustained reforms are crucial to improving business transactions and logistics, boosting private sector investment, and reducing reliance on public capital.
Key Findings:
i.As per the report, Indian equity markets are expected to remain dynamic and competitive due to strong growth prospects and better regulation, and foreign inflows into India government bonds have increased since the country joined major emerging market indexes, which is further anticipated to grow.
ii.The report suggested that India must develop infrastructure and geopolitical strategies, particularly regarding its extensive coastline, to maximize trade benefits.
- The report noted that about 90% of India’s trade is seaborne or maritime, which makes it to more important for India, to develop robust port infrastructure to manage increasing exports and bulk commodity imports.
iii.The report underscored about the rising domestic energy demands, and has recommended that India requires to develop sustainable technologies, including renewable and low-emission fuels, balancing energy security with its energy transition plans.
- The report revealed that Agriculture sector will rely on advanced technologies and new policies to enhance infrastructure and productivity.
- The report emphasized to address critical infrastructure issues such as irrigation, storage, and supply distribution to ensure food security and economic stability.
iv.As per the report, the use of Artificial Intelligence (AI) can play a pivotal role in boosting India’s economic growth. It will bring opportunities for Public-Private Partnerships (PPP) to replicate the success of India’s digital infrastructure.
v.The report cautioned about high food price inflation due to climate change, which could constrain monetary policy and will make investment more expensive.
India’s Strong Economic Growth:
i.The report showed that Goods and Services Tax (GST) collections in India reached at an all-time monthly high of Rs 2.1 trillion in April 2024 and remained healthy in May and June.
ii.India registered strong Hong Kong and Shanghai Banking Corporation (HSBC) India Purchasing Managers’ Index (PMI) readings so far in FY25 and manufacturing and services sectors activity continued to perform well above the neutral mark of 50. The HSBC India PMI is compiled by S&P Global Market Intelligence.
- As per S&P Global, India Composite PMI Output Index reached one of the highest levels in nearly 14 years, driven mainly by favourable economic conditions, strong demand, capacity expansion, increased new work intake and productivity gains.
About S&P Global Inc.:
President and Chief Executive Officer (CEO)- Douglas L. Peterson
Headquarters- New York, the United States of America (USA)
Established- 1917
