India Set to Become World's Third-Largest Economy by 2031, S&P Global Reports

S&P Global's report projects India to be the third-largest economy by fiscal 2030-31, driven by a 6.7% growth rate. Key measures suggested include continued reforms, infrastructure development, and leveraging technology like AI. The IMF also raised growth projections to 7% for 2024.

India is poised to become the third-largest economy by fiscal year 2030-31, according to a report by credit rating agency S&P Global titled 'India Forward Emerging Perspectives.' The report cites a robust projected annual growth rate of 6.7% as the driving factor behind this surge.

The report stresses that sustained reforms are crucial for India's economic momentum. Recommendations include improving business transactions and logistics, boosting private sector investment, and reducing reliance on public capital. S&P Global also foresees a dynamic and competitive Indian equity market, bolstered by strong growth prospects and improved regulation.

Foreign inflows into Indian government bonds have surged since India joined major emerging market indexes, a trend expected to continue. The agency advises India to further develop its infrastructure and geopolitical strategies, particularly to maximize trade benefits along its extensive coastline.

According to the report, strong port infrastructure is essential to handle rising exports and bulk commodity imports, as about 90% of India's trade is maritime. It also highlights the need to address rising domestic energy demands through sustainable technologies, including renewables and low-emission fuels, balancing energy security with energy transition plans.

The report emphasizes that advancements in agriculture will rely on new technologies and policies to enhance infrastructure and productivity. Addressing critical issues such as irrigation, storage, and supply distribution is paramount for ensuring food security and economic stability. The use of AI is projected to significantly boost economic growth, offering opportunities for public-private partnerships to emulate the success of India's digital infrastructure endeavors.

India's GDP grew by an impressive 8.2% during the fiscal year 2023-24, making it the fastest-growing major economy. According to official data, the economy expanded by 7.2% in 2022-23 and 8.7% in 2021-22. Many global ratings agencies and multilateral organizations have revised their growth forecasts for India upward. In July, the International Monetary Fund (IMF) raised India's growth projections for 2024 from 6.8% to 7%, underscoring the country's status as the fastest-growing economy among emerging markets and developing economies.

The IMF initially projected a growth rate of 6.5% for 2024, revising it to 6.8% and eventually 7%. The institution attributes this upward revision to robust domestic demand and a rising working-age population, solidifying India's growth trajectory. (ANI)

(With inputs from agencies.)