The rating agency noted that if the economy maintains a real GDP growth of 6.25%, it could become an upper-middle-income country by FY36, with per capita income reaching $9,218 by FY47.
However, it pointed out that even a faster rate of growth of 8% could help it achieve the $15 trillion mark by FY43.
“The onward journey of Indian economy… will depend on the rate at which the real GDP growth, inflation (GDP deflator) and INR/USD exchange rate evolve. We expect the Indian economy to enter into the upper-middle income category over FY33–FY36 and to a $15 trillion economy over FY43-FY47”, said Dr Sunil Kumar Sinha, principal economist, Ind-Ra
India plans to become a $30 trillion economy by 2047, attaining a developed economy status. Ind-Ra economists pointed out that the road to $30 trillion could be challenging, as the economy would need to grow 9.7% per annum.
“In the past 50 years, there have been only two instances when the economy grew higher than 9.7% per annum in USD terms for a period of 10 years: 1973-1982 and 2003-2012,” they said, further highlighting that no country has been able to sustain such high rate of growth for long periods.The Indian economy likely expanded 7.6% in FY24, but experts indicate that growth is expected to slow down in the coming fiscal.Ind-Ra highlighted that even maintaining a 7% growth for a sustained period could be difficult without support from global demand and trade.
“Unfortunately, global demand/trade have become fairly restrictive FY12 onwards,” they pointed out.
The rating agency also listed energy transition, low carbon manufacturing/services and expansion of the middle class as factors determining India’s transition to a developed economy.
“The rising incomes and aspirational lifestyle of middle-income class are driving demand for a wide range of goods and services and thus acting as a growth engine,” Ind-Ra noted.
