According to ratings agency Crisil, the Indian economy is expected to increase significantly in the upcoming fiscal year, with a GDP growth rate of 6.8%. This was announced on Wednesday. To determine how quickly an economy is expanding, the GDP growth rate analyzes the change in a nation's economic production from year to year (or quarterly). The ratings agency added that India's economy is predicted to quadruple to $7 trillion and that, on this development track, the country can achieve upper middle-income status by 2031.
According to Crisil's India Outlook report, the Indian economy can maintain - or perhaps improve - its growth potential to become the world's third-largest by 2031 with the help of cyclical levers and domestic structural reforms.
According to the Crisil India Outlook report, "India's real GDP growth will likely moderate to 6.8% in fiscal 2025 after a better-than-expected 7.6% this fiscal."
India's GDP is at $3.6 trillion. After the United States, China, Japan, and Germany, it has the fifth-largest economy in the world. By fiscal 2031, Crisil projects the GDP to grow to $6.7 trillion.
It predicted that over the next seven fiscal years (2025–2031), the Indian GDP will grow from $5 trillion to $7 trillion.
Electronics, electric vehicles, and the energy transition are among the rapidly expanding industries that make up 16 percent of the additional capital expenditure in the fiscal years 2023 and 2024.
"A projected average expansion of 6.7% in this period will make India the third-largest economy in the world and lift per capita income to the upper-middle income category by 2031," Crisil stated.
Amish Mehta, the CEO and Managing Director of Crisil, stated, "India will be an upper-middle income country and the third largest economy, which will be very positive for domestic consumption." Due to high capacity utilisation across important industries, opportunities from global supply-chain diversification, the push for infrastructure investment, the necessity of the green transition, and strong lender balance sheets, India's manufacturing sector is in a sweet spot.
The nations classified as lower-middle income by the World Bank fall into the $1,000–4,000 per capita income range, whereas nations classified as upper-middle income fall into the $4,000–12,000 per capita income range.
According to the Crisil research, the economic forecast is expected to face short- and medium-term difficulties from geopolitics, uneven global recovery, climate change, and technology upheavals.
This week, rating agency Moody's also increased its estimate of India's GDP growth in 2024, citing optimism in the nation's economy both domestically and internationally due to the country's booming manufacturing sector and infrastructure expenditure.
The rating agency stated in its Global Macro Outlook 2024–25 that "India's economy has performed well and stronger-than-expected data in 2023 has caused us to raise our 2024 growth estimate to 6.8% from 6.1%."
It should be mentioned that the Statistics Ministry increased its estimate of GDP growth for FY24 from 7.3% in its first advance projection to 7.6% in its second updated estimate.
The International Monetary Fund projects 6.7% GDP growth in FY24, compared to the Reserve Bank of India's 7% prediction.
"We believe that with global headwinds fading, the Indian economy should be able to comfortably register 6.0%-7.0% real GDP growth and we therefore forecast around 6.8% growth in calendar year 2024, followed by 6.4% in 2025," stated Moody's.
