Giving a positive signal towards India’s growth story, the Crisil Ratings on Wednesday projected India’s GDP growth at 6.8% in the next fiscal.
It further said India will become an upper middle-income nation by 2031 with the economy doubling to USD 7 trillion.
In its India Outlook report, Crisil said the Indian economy will take support from domestic structural reforms and cyclical levers and can retain — perhaps even improve — its growth prospects to become the third largest economy by 2031.
The report highlighted that after a better-than-expected 7.6% this fiscal, India’s real GDP growth will likely moderate to 6.8% in fiscal 2025.
Next seven fiscal years (2025-2031) will see the Indian economy crossing the USD 5 trillion-mark and inching closer to USD 7 trillion, it added.
“A projected average expansion of 6.7 per cent 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 said.
The Indian economy will take support from domestic structural reforms and cyclical levers and can retain, perhaps even improve, its growth prospects to become the third largest economy by 2031.
Crisil expects the economy to expand to USD 6.7 trillion by fiscal 2031, and the year will mark India’s entry into the club of upper middle-income countries with per capita income rising to USD 4,500.
Crisil report further said that the near- and medium-term challenges to growth outlook would come from geopolitics, slowing potential growth from an uneven global recovery, climate change and technological disruptions.
The near term will be characterized by fiscal consolidation, with the gradually receding role of government capex and expectations of the baton being taken up by the private sector.
Emerging sectors, which are growing faster than others, are electronics, EV, and energy transition-intensive, and they account for 16% of the incremental capex in fiscals 2023 and 2024.
Notably, India, with a GDP size of USD 3.6 trillion, is currently the fifth largest economy in the world, after the US, China, Japan and Germany.