By the end of the current decade, India’s per capita income will breach USD 4,500, said Joshi from Crisil.
Rating agency Crisil on 6th March projected that India’s real GDP growth will moderate to 6.8 percent in FY2025 from the 7.6 percent expected in the ongoing fiscal.
However, the agency added that even with the moderated economic growth rate, India will continue to be the fastest-growing large economy.
Crisil’s India Outlook report
In its India Outlook report, Crisil said that the nature of government spending will provide some support to the investment cycle and rural incomes.
Crisil’s chief economist Dharmakirti Joshi told reporters that it expects the RBI to cut rates by 0.50-0.75 percentage point in FY25, but added that the cuts will be gradual with the earliest one not before June.
The rating agency stated that the growth momentum will continue through this decade on significant private investments in emerging sectors, continuing government spending on infrastructure, efficiency gains, and ongoing reforms pushed from increasing digitisation and physical connectivity.
Crisil On Indian Economy
India’s current GDP size is $3.6 trillion and the country is the fifth largest economy in the world, after the US, China, Japan and Germany.
Crisil projected that the next seven fiscals will see the Indian economy cross the USD 5 trillion mark and close in on USD 7 trillion at an estimated 6.7 per cent average annual growth added the agency’s managing director and chief executive Amish Mehta.
He also claimed that India will be the third-largest economy in the world, and an upper middle-income country by FY 2031.
Crisil On Indians Per Capita Income In 2031
According to the World Bank definition, lower-middle income countries are those whose per-capita income is between $1,000-4,000, and upper-middle income countries are those whoese per capita income is between $4,000-12,000.
By the end of the current decade, India’s per capita income will breach USD 4,500, said Joshi from Crisil.
He said India gained mainly because of its investments in the digital and physical infrastructure that it has created. In a note, the agency said Both manufacturing and services cylinders will fire till FY31.
“We project manufacturing and services to grow 9.1 per cent and 6.9 per cent, respectively, between fiscal 2025 and 2031,” Joshi said.
Crisil On Indian Economy’s Future
Despite concerns about private capital expenditure, Crisil said fixed investments by private companies have started increasing and also have a positive future for growth
It also stated that the industrial capex will rise from Rs 3.9 lakh crore to Rs 6.5 lakh crore annually on average between fiscal 2024 and 2028, as compared to the preceding five fiscal.
Investments in new-age sectors like semiconductors or green hydrogen will come either from global multinationals or large domestic corporate houses, said a senior official from the agency.
The corporate houses are likely to go for bond borrowings rather than relying on bank lending, the official added.
(With Inputs From PTI)