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In a bold projection, Reserve Bank of India (RBI) Deputy Governor Michael Debabrata Patra suggested that India could become the world’s second-largest economy by 2031, with the potential to be the largest by 2060. Speaking at the Mid-Career Training Programme for Indian Administrative Service officials at the Lal Bahadur Shastri National Academy of Administration in Mussoorie, Patra emphasized India’s ambitious economic trajectory.
Patra highlighted that India’s economic journey has been eventful and challenging. “India has become a ₹295.4 lakh crore or USD 3.6 trillion-dollar economy at current exchange rates,” he said. Despite this growth, India remains in the lower middle-income group, with a per capita income of ₹2,07,030 or USD 2,500. However, he asserted that if India can sustain a growth rate of 9.6% per annum over the next decade, it could break free from the lower middle-income trap and achieve developed economy status.
The Organisation for Economic Cooperation and Development (OECD) supports Patra’s optimistic outlook. The OECD projects that India will surpass the US in purchasing power parity (PPP) terms by 2048, becoming the world’s second-largest economy.
Addressing inflation concerns, Patra noted that the RBI is committed to aligning inflation with its target. He projected that inflation would average 4.5% in 2024-25 and ease to 4.1% in 2025-26. “The taming of inflation lays the foundations of sustained high growth in the future,” Patra added.
Patra also shared positive news about India’s banking sector. The Gross Non-Performing Assets (GNPAs) in the banking system have steadily declined from their peak in March 2018 to 2.8% of total assets by March 2024. Adjusted for provisions, net NPAs stand at just 0.6%. Additionally, India’s capital and liquidity buffers are well above regulatory norms, indicating a robust financial system.
Patra’s remarks underscore India’s potential to achieve remarkable economic milestones in the coming decades. With sustained high growth rates, effective inflation management, and a resilient banking sector, India is well-positioned to emerge as a global economic powerhouse.
As the world watches India’s economic progress, the country’s efforts to overcome structural challenges and achieve higher growth rates will be crucial. The vision of becoming the world’s second-largest economy by 2031 and the largest by 2060 reflects India’s aspiration for a transformative economic future.
Sources By Agencies
