By S Jha
New Delhi, December 6: The fast and furious gains on the street are being backed by a sense of rerating of India. S&P in its report has estimated that India will become the third largest economy by 2030. The rating agency has also claimed that India is poised for a fast-paced economic growth.
The rating agency’s assertions have come at a time when political commentators and brokerages have been claiming that Prime Minister Narendra Modi now looks certain to bag his third straight term in the office. The victory of the Bharatiya Janata Party has given an eruptive rally on the bourses with Nifty gaining by almost 1000 points in a short span of time. The gains on Bank Nifty have also been furious.
Indices are also gaining steam from sectoral rotations by investors which appears to be giving an extended rally to the street. The chemical and IT stocks gained in the Wednesday session, while auto scrips were also seen in much demand. The defence sector was the star of the day as the likes of Hindustan Aeronautics, Cochin Shipyard, and Mazghaon Dockyard strongly rallied in the session.
“India is set to become the third-largest economy by 2030, and we expect it will be the fastest growing major economy in the next three years. A paramount test will be whether India can become the next big global manufacturing hub, an immense opportunity. Developing a strong logistics framework will be key in transforming India from a services-dominated economy into a manufacturing-dominant one,” said S&P.
The rating agency has claimed that India will growth with seven per cent plus GDP growth in the next three years and also retain the tag of being the fastest growing economy in the world for an extended duration.
The Ministry of Statistics and Programme Implementation had stated earlier that India’s GDP at constant prices grew at the rate of 7.6 percent annually, during the second quarter of the year 2023-24. In the first half of fiscal year 2023-24, the GDP growth was 7.7 percent. The economic commentators claim that if this pace of GDP growth stays, India’s per capita income may reach $3,600 by September 2030. This will further translate into a demand-led growth, which may spur the manufacturing capacvity, as well as scale of the services sectors in the country.
“Unlocking the labour market potential will largely depend upon upskilling workers and increasing female participation in the workforce. Success in these two areas will enable India to realize its demographic dividend. A booming domestic digital market could also fuel expansion in India’s high-growth startup ecosystem during the next decade, especially in financial and consumer technology. In the automotive sector, India is poised for growth, building on infrastructure, investment, and innovation,” added the S&P in its report.
India is also likely to gain from the crashing crude oil, which is now trading at five-month low of $69 per barrel, while there is a major push to renewable energy to cut down on deoendency on fossil fuels.
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