S&P Global said services will maintain a strong role in the economy.
India will grow at a rate of 6.7 per cent per year from 2023-24 and become a $6.7 trillion economy by 2030-31, research and analytics firm Standard & Poor Global has said. India's Gross Domestic Product (GDP) was $3.4 trillion in 2022-23. The rating agency also said that the per capital income in the country is projected to rise to about $4,500 from $2,500. The report was released on a day when another agency, Morgan Stanley, upgraded India to the 'overweight' category, giving it top rating among emerging markets in India.
"We expect India to grow 6.7 per cent (average) from fiscal 2024 to fiscal 2031, catapulting GDP to USD 6.7 trillion from USD 3.4 trillion in fiscal 2023. Per capital GDP will rise to about USD 4,500," S&P Global said in a report titled 'Look Forward: India's Money'.
However, the agency warned that a global slowdown and lagged effect of a policy rate hike by RBI could slow down growth to 6 per cent in the current fiscal.
Capital accumulation will drive India's economy toward this desirable path with the government and increasingly private sector investing in infrastructure and manufacturing, the report said.
"You will see growth peak at around fiscal 2025-26," said Crisil chief economist Dharmakirti Joshi, who was part of the team that prepared the report.
The report said that India will likely see gains from reforms such as Goods and Services Tax (GST). It added that implementation of the Insolvency and Bankruptcy Code would also help to drive a healthy credit culture.
S&P Global said that even with India recalibrating toward manufacturing, services will maintain a strong role in the economy.
India had clocked a 7.2 per cent GDP growth in 2022-23 fiscal. Commerce and Industry Minister Piyush Goyal had called it "historic", adding that India would emerge as a developed nation in the next 25 years.