In a noteworthy revelation, SBI Research economists project that India will claim the prestigious position of the world’s third-largest economy by FY28, surpassing previous estimations by two years. The optimistic forecast is rooted in India’s expected growth of 8.1% in the first quarter of FY24, contributing to an overall growth rate of 6.5%. Notably, India achieved an impressive 13.5% growth in the first quarter of FY23.
While this projection aligns with the Reserve Bank of India’s (RBI) forecast of 6.5% growth in FY24, it exceeds the International Monetary Fund’s (IMF) revised projection of 6.1%. The IMF’s upward revision by 0.2 percentage points is attributed to robust domestic investment, further bolstering India’s growth prospects.
To attain the monumental goal of becoming the third-largest economy, India must consistently log 11-11.5% annual nominal growth, an ambitious yet attainable target with a growth rate of 6.5-7%. The economists assert that in the current uncertain global landscape, this growth range of 6.5-7% should be considered the new normal for India.
Additionally, the researchers assert that the current estimates could undergo further upward revision with the implementation of prudent policy measures and the evolution of global geopolitical dynamics.
As India’s economy surges forward, crossing the $5 trillion mark seems inevitable on its journey to securing its position as the third-largest economy globally. With improving macroeconomic prospects, India is poised to fully harness its potential, ushering in transformative changes and elevating its global standing.
The economists shed light on the growth potential of specific states as well. Uttar Pradesh and Maharashtra are projected to emerge as key contributors to India’s economic prowess, each crossing the $500 billion mark by FY28. Together, these states are expected to account for nearly a quarter of India’s total GDP, further solidifying the nation’s economic ascendancy.