India’s growth must not be taken as inevitable
Global Market Intelligence, we will jump from our fifth spot to become the world’s third biggest by 2030, moving past Germany and Japan, with only China and the US ahead of us. At $7.3 trillion, our nominal GDP in 2030 would be more than double the $3.5 trillion figure for 2022. To a significant extent, S&P’s optimism stems from our young demographic profile and growing incomes, which make the country a vast market for businesses to serve.
With about two-thirds of our population below the age of 35, we have a potentially vast workforce that an ageing China will soon be unable to match. Of course, the country will need to create jobs at scale, on which we have been falling short, to make the most of our youth bulge. And that’s just the labour part.
We face challenges of capital too. One problem has been the lopsided expansion of our economy. In recent years, much of the heavy lifting to drive it ahead has been done by outsized government spending.
Private investment was expected to join the game (or get ‘crowded in’), but a prolonged slump that’s proving too slow to reverse has left the economic momentum at risk of flagging off. With the Centre’s fiscal thrust nearing exhaustion, we will have to let private enterprise lead the expansion at some point. How soon that happens is hard to say, though some businesses are ready for it.
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