India may transform into an upper middle income economy by FY33-36: India Ratings and Research

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India could transition into an upper middle-income economy by fiscal years 2033 to 2036 under different scenarios and become a $ 15 trillion economy over fiscal 2043 to fiscal 2047, said a report by India Ratings and Research on Monday.

Listing out various scenarios, the agency said that to become a $5 trillion economy by FY30 with per capita income of $ 3,467, the economy would require a real GDP growth rate of 6.25%, GDP deflator growth 3.5% and INR/USD depreciation 3.25%. But to transform to a $5 trillion economy by FY2029 with capita income of $ 3,530, real GDP growth per annum would have to be faster at 8%.

“The onward journey of Indian economy from India Ratings and Research (Ind-Ra) estimated $3.6 trillion dollars in FY24 will depend on the rate at which the real GDP growth, inflation (GDP deflator) and INR/USD exchange rate evolve,” said Sunil Kumar Sinha, Senior Director and Principal Economist. Until 2006, the World Bank classified India as a low-income country.

In 2007, India moved to the lower-middle income country and since then has remained there. India’s per capita GDP stood at $ 2,390 in 2022. To become an upper-middle-income country, the per capita income would have to be in the range of $4,466- $13,845.

According to the agency, to reach $30 trillion by FY2047, the Indian economy will have to grow at 9.7% per annum over FY24-FY47 in the current USD terms. It however, cautioned that 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. “Cross country experience of 50 years suggests that it is difficult to maintain and sustain such high rate of real GDP growth in USD terms as the economy starts maturing,” it said.

No doubt, the Indian economy is showing robust growth, but cross-country experience also shows that no major economy has been able to grow 7% (real) per annum on a sustained basis without the support of global demand or trade, it said.

However, irrespective of whether India attains the $ 30 trillion target by 2047 or not, India Ratings estimates of per capita income reaching $ 9,218 to $ 9,920 over FY43-FY47 means India would be much closer to the high-income country’s threshold of $ 13,846 per capita.

Recently, rating agency Crisil had recently said that India can attain upper middle-income status by 2031, with the economy expected to double to $7 trillion while projecting that the economy would grow by 6.8% in the next fiscal.



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