According to Chetan Ahya, chief Asia economist at Morgan Stanley, India would more than quadruple its GDP (gross domestic product) from its current level of $3.4 trillion to $8.5 trillion over the next ten years. years.
By 2027, India will have the world’s third-largest economy thanks to a policy shift that will encourage investment and take advantage of demographic trends and public digital infrastructure, according to a prediction from Morgan Stanley.
Furthermore, he predicted that over the next ten years, India’s Gross Domestic Product (GDP) will rise from its current level of $3.4 trillion to $8.5 trillion.
According to Chetan Ahya, chief Asia economist at Morgan Stanley, “India will gradually add more than $400 billion to its GDP each year, a size surpassed only by the United States and China.” . He said the estimate is underpinned by a confluence of supportive domestic and international forces and noted a shift in focus from redistribution policy towards promoting investment and job growth.
He cited changes in government policy as examples of tax reforms, such as the goods and services tax (GST), a reduction in the corporate tax rate and the introduction of production-related incentive schemes. .
India is becoming a prime location in a multi-polar world where companies are diversifying their supply chains, he said.
India is about to enter a period where incomes will grow rapidly on a high basis. By comparison, increasing India’s GDP by $3 trillion since 1991 took 31 years. Our estimates indicate that it will take only seven more years for GDP to grow by another $3 trillion. In terms of digital infrastructure, he also made a distinction between India and other economies. While other economies have opted for private networks, India has created a public digital infrastructure based on Aadhaar.
He said additional layers are being built that will use this digital infrastructure to more effectively match customers to businesses and reduce operating costs.
In this context, he took the example of the Open Network for Digital Commerce (ONDC), which positions itself as the e-commerce equivalent of the UPI (universal payment interface).
“India’s shift in policy approach brings it closer to the East Asian model of leveraging exports, increasing savings and recycling them for investment,” Ahya noted. He used China as an example, noting the 15-year disparity between India’s GDP and China’s GDP in 2007.
However, he continued, India’s working-age population is growing, suggesting that it will have a longer development track. The median age in India is currently 11 years younger than in China.
Differences in productivity growth also favor India. When all of this is considered, we expect India’s real GDP growth to average 6.5% over the next ten years, while China’s will average 3.6%.