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Finance Minister Nirmala Sitharaman has said India has emerged as one of the fastest-growing major economies in the world and is expected to be one of the top-three economic powers globally in the next 10-15 years.
Sitharaman added that the global economic outlook remains challenging and the Indian economy is not insulated from the impact of global economic developments, according to a PTI report. She was speaking at the US-India Businesses and Investment Opportunities event in New Delhi on Friday.
Also Read: India On Track To Become Third-Largest Economy By 2027, Third-Largest Stock Market By 2030, Says Morgan Stanley
Sitharaman said India has carved out its growth trajectory supported by the above-normal south-west monsoon, public investment, strong corporate balance sheets, upbeat consumer and business confidence and receding threat of the COVID-19 pandemic.
“India has emerged as one of the fastest-growing major economies in the world. It has recently surpassed the UK to become the fifth-largest economy in the world and is expected to be one of the top three economic powers globally over the next 10-15 years,” she said, according to the PTI report.
Listing out some of the important measures taken by the government to boost the economy, the finance minister mentioned about Production Linked Incentive (PLI) schemes across sectors, PM GatiShakti programme and semiconductor mission.
“We recognise foreign capital flows as a vital component of India’s growth story. Key reforms include simplification and rationalisation of the Foreign Portfolio Investor (FPI) regulations, increase in aggregate foreign investment limit, introduction of Common Application Form (CAF) for registration of FPIs, and opening of new channels of debt investments like the Voluntary Retention Route (VRR) and Fully Accessible Route (FAR),” she said.
The success of these measures is reflected in the sustained investment flows entering India through the FPI route, she said.
Significantly, she said, the US is the top source country of FPI investment in India, with the Asset under Custody (AUC) of FPIs from the USA standing close to USD 234 billion as on September 30, 2022.
On India’s digital prowess, Sitharaman said it will define India’s growth and development in the next decade — medium to long term.
India has built an entirely new digital economy by leveraging the foundations of over a billion bank accounts, a billion mobile phones, and a billion digital identities (Aadhaar), she said.
“Today, we have a powerful story on Digital Public Goods (DPG) to tell the world. The economy is seeing an exponential increase in new-age FinTech firms. India has the highest FinTech adoption rate as compared to the global average,” she said.
According to the latest data, India’s industrial output, as measured by the Index of Industrial Production (IIP), grew 3.1 per cent in September, supported by a double-digit increase in electricity generation. This is compared with a contraction of 0.8 per cent in the previous month.
Recently, global investment bank Morgan Stanley in its report said India is on track to become the world’s third-largest economy by 2027, surpassing Japan and Germany, and have the third-largest stock market by 2030, on the back of global trends and key investments the country has made in technology and energy.
It added that India is already the fastest-growing economy in the world, having clocked 5.5 per cent average gross domestic product growth over the past decade. Now, three megatrends—global offshoring, digitalization and energy transition—are setting the scene for unprecedented economic growth in the country of more than 1 billion people.
Ridham Desai, chief equity strategist (India) of Morgan Stanley, said in the report, “We believe India is set to surpass Japan and Germany to become the world’s third-largest economy by 2027 and will have the third-largest stock market by the end of this decade… Consequently, India is gaining power in the world order, and in our opinion these idiosyncratic changes imply a once-in-a-generation shift and an opportunity for investors and companies.”
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