1. Home
  2. English
  3. Business
  4. India may become a USD 7.5 trillion economy in 5 years: Parikh
India may become a USD 7.5 trillion economy in 5 years: Parikh

India may become a USD 7.5 trillion economy in 5 years: Parikh

0
Social Share

Virendra Pandit

 

New Delhi: Amid grim projections of a cascading global economic recession next year, India’s leading banker said on Monday the South Asian country, currently the world’s fifth largest economy, can become a USD 7.5 trillion economy in the next five years.

India will remain one of the fastest-growing major economies. However, being coupled with the world economies, it will face some slowdown, said Deepak Parekh, Chairman of HDFC Ltd.

“I believe India can grow from a USD 3.4 trillion to a USD 7.5 trillion economy within the next 5 years. For India, the pace of growth is exciting,” the media quoted him as saying at the World Congress for Accountants.

India will grow at a slightly slower pace of 7 percent in 2022, but an inherent resilience is now embedded in the Indian economy, Parikh added.

India’s middle class—the number of households with USD 35,000 as annual income — may rise five-fold from 5 million now to 25 million by 2031, he said citing a recent report. Its per capita income may increase from USD 2,300 to USD 5,200 during the period.

“India has a lot going for it right now… I have never been as optimistic about India as I am today,” Parikh said, enumerating government reforms like encouraging start-ups, rolling out 5G services, and Gati Shakti, a national plan for boosting infrastructure projects.

Parekh asserted India had made strides in digitalization and financial inclusion. “As a services-driven economy, we are known as the back office of the world and we are now positioning ourselves as a high-end manufacturing hub as well,” he said.

About world central banks balancing raising interest rate hikes to curb inflation without choking economic growth, he said the organizations have a tough role ahead. “It’s a case of damned if they do, damned if they don’t”.

With the United States seeing a slight dip in the latest inflation print, markets hope that the Federal Open Market Committee may opt for a smaller rate increase of, say 50, basis points in early December, rather than force down a fifth consecutive rate increase of another 75 basis points.

“India, fortunately, has not had jumbo rate hikes, but has followed a more calibrated increase in interest rates”, Parekh said.

The global business ecosystem is entangled in a web of complexity. There are many frictional forces playing out, such as de-globalization, trust deficit, rising protectionism, broken supply chains, and risks arising from dodgy crypto assets.

“The world is in the midst of a ‘global polycrisis,” Parekh said, citing multiple challenges playing out simultaneously.

 

LEAVE YOUR COMMENT

Your email address will not be published.

Join our WhatsApp Channel

And stay informed with the latest news and updates.

Join Now
revoi whats app qr code