In 2016, Amitabh Kant, chairman of Niti Ayog anticipated that India would turn out to be a $10 trillion economy by 2030. However, a report by HSBC suggests that it is unlikely to happen. It predicts that the country’s economy would grow from $2.8 trillion to $5.9 trillion by 2030. The reason for this is that Kant’s prediction is based on the conjecture that India would grow at an average of 10%. HSBC, on the other hand, estimates a growth of 6.2%. This article discusses the possible future growth of the Indian economy.
India currently holds the position of being the sixth largest economy in the world. In the coming decade, we are likely to jump to the position of being the second largest economy second only to China.
Reasons for Economic Growth
The south of India is slowly becoming the technical heart of Asia. Bangalore will likely surpass Tokyo in terms of manufacture of consumer electronics. Mumbai is a huge economic machine generating economic centres and hubs of renowned multinational companies, which help the acceleration of our GDP. As of 2016, economy for Mumbai Metropolitan Region has been valued from $151 to $638 billion. This has resulted in it becoming the largest or second largest productive metro areas of India.
Gujarat as a state is at the highest position for the number of enterprises per kilometre square, around 1500-1700 enterprises. The state consists of various small, medium and large businesses. East India is growing led by Kolkata, the third highest GDP in India.
Research by Standard Chartered indicates that India is likely to become a larger economy than the USA by 2030. This report also predicts that China is likely to outdo the rest of the countries to reach the top. It also says that Indonesia will be amid the top five. China, India, USA, Indonesia and Turkey are likely to be the top five countries.
India’s GDP growth is expected to speed up to 7.8% by 2020. With this growth trend, India is likely to be the main powerhouse among the top five economies, partly led by ongoing reforms, comprising the introduction of GST and insolvency and Bankruptcy code (IBC), the report said.
In the next decade, China’s growth is likely to remain strong. However, by 2030, it is possible to moderate to 5%, reflecting a natural slowdown.
It does not appear likely that India will triple energy production by 2030 or build out infrastructure at the rate needed for a $10 trillion economy. The likely range for India’s economy in terms of nominal GDP is $5-7 trillion in 2030.