World
‘India could be world’s second-largest economy in just 7 years and world’s largest in…’: RBI deputy governor makes big prediction
Could India soon be the world’s second-largest economy? RBI Deputy Governor Michael Patra says it is “possible to imagine India moving forward in the next decade to become the world’s second-largest economy not by 2048 but by 2031 and the world’s largest economy by 2060.”
In a speech titled ‘Future-Proofing India’s Monetary Policy’ at the Lal Bahadur Shastri National Academy of Management, Mussoorie, Patra noted that the Organisation for Economic Co-operation and Development (OECD) already projects that in PPP terms, India will overtake the US by 2048 to become the world’s second-largest economy. However, he sees a possibility of this happening sooner – in the next seven years!
Patra highlighted India’s inherent strengths and its determination to achieve its ambitious goals. He noted that the “era of China” began in the early 1990s, propelling it to become the second largest economy globally. However, he emphasized that India’s time has come, starting in 2010, and several factors are converging to enable India to emerge as a global leader in the next two to three decades.
Patra believes that several important factors will drive India’s growth.
In a speech titled ‘Future-Proofing India’s Monetary Policy’ at the Lal Bahadur Shastri National Academy of Management, Mussoorie, Patra noted that the Organisation for Economic Co-operation and Development (OECD) already projects that in PPP terms, India will overtake the US by 2048 to become the world’s second-largest economy. However, he sees a possibility of this happening sooner – in the next seven years!
Patra highlighted India’s inherent strengths and its determination to achieve its ambitious goals. He noted that the “era of China” began in the early 1990s, propelling it to become the second largest economy globally. However, he emphasized that India’s time has come, starting in 2010, and several factors are converging to enable India to emerge as a global leader in the next two to three decades.
Patra believes that several important factors will drive India’s growth.
- First, investment, traditionally supported by domestic savings, is stabilizing and showing signs of acceleration, complemented by a manageable current account deficit and external debt.
- Second, effective monetary policy and inflation control have achieved macroeconomic and financial stability, which supports growth prospects. The improving health of the banking sector and ongoing fiscal consolidation further enhance stability.
- Third, India’s favorable demographics, characterized by a young and expanding workforce, promise sustained growth.
- Another growth multiplier is India’s digital revolution. India is emerging as a global leader in leveraging digital technologies for transformative change.
He said if India can achieve a growth rate of 9.6 per cent per annum over the next decade, it is estimated that the country will break free from the lower middle-income trap and become a developed economy. “These gains need to be reflected in per capita income with two milestones – a per capita income level of $4,516-14,005 to attain middle-income country status, and beyond that level to attain the status of a developed country today,” he said.
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