INCLUSIVE GROWTH IN INDIA KEY TO VIKSIT BHARAT

Our country has had the highest real GDP growth across all G20 nations in the first three quarters of FY2024, but does this reflect the status of our human development as well?

- DEBOPAM CHAUDHURI

iT is certainly a great time to be in India for business. A democratic political system, stable governance, liberalized economy, demographic advantage, consumption trends, upgrading infrastructure and a strong financial sector embodied by robust regulators are contributing to India's economic resilience. In an uncertain world, where economists are still grappling with whether the US will experience a soft landing or when China will come out of its current rout, India's growth trajectory is relatively clear. It is well on its path to becoming the third-largest economy within 48-54 months, and reaching the $10 trillion target by 2035.

Global confidence in India has been reiterated even by credit rating agencies, despite their reluctance to upgrade its sovereign rating. Over the last few days, agencies like Moody's and Fitch revised their growth forecast upwards. Fitch now expects FY2025 GDP growth to be at 7 percent (from 6.5 percent expectations earlier) and Moody's expects FY2024 economic activity to rise by 6.8 percent (from 6.2 percent expectations earlier). However, these upgrades are yet to be reflected in their rating stance. At BBB-, India is clubbed with smaller nations with either poor debt repayment histories or heavy exposure to foreign debt like Hungary, Greece, Romania and Mauritius. Incidentally, India does not have such problems, and maintains a small current account deficit, a credible fiscal consolidation roadmap and the 5th largest GDP.