Crisil, a renowned rating agency, foresees India's economy surging ahead, projecting a growth rate of 6.8 percent in the forthcoming financial year. The agency also envisions India achieving upper-middle-income status by 2031, reflecting a positive trajectory supported by domestic reforms and cyclical factors. This forecast carries the ambition of propelling India towards becoming the world's third-largest economy.
Crisil's India Outlook report asserts that the anticipated GDP growth of 6.8 percent in fiscal 2025 follows a commendable performance this fiscal year, with growth surpassing expectations at 7.6 percent.
Looking ahead to the period spanning from 2025 to 2031, Crisil anticipates significant economic expansion, with India's economy poised to exceed $5 trillion and potentially reach close to $7 trillion. Moreover, Crisil expresses confidence that India may even surpass these growth targets as it aspires to ascend to the rank of the world's third-largest economy within the next seven years.
With an average growth rate of 6.7 percent during this period, India is anticipated to emerge as the third-largest economy globally, accompanied by an elevation of per capita income to the upper-middle-income bracket by 2031.
Presently occupying the position of the fifth-largest economy, India aims to achieve a milestone of $6.7 trillion by fiscal 2031, aligning with its ambition to attain upper-middle-income status.
By fiscal 2031, Crisil predicts that India will indeed transition into the upper-middle-income category, with per capita income reaching $4,500. This signifies a remarkable leap, considering that lower-middle-income countries typically have per capita incomes ranging from $1,000 to $4,000, while upper-middle-income countries fall within the $4,000 to $12,000 bracket, according to World Bank classifications.
Crisil's Managing Director and CEO, Amish Mehta, emphasizes the positive implications of India's ascension to the third-largest economy and its transition to an upper-middle-income country on domestic consumption.
Furthermore, the flourishing manufacturing sector, propelled by factors such as global supply-chain diversification, infrastructure investment, and green transition initiatives, is expected to play a pivotal role in India's economic trajectory. Mehta underscores that sustained reforms, enhanced global competitiveness, and advancement up the value chain are poised to elevate manufacturing's contribution to India's GDP beyond the projected 20 percent by fiscal 2031.
Echoing this sentiment, Crisil's Chief Economist, Dharmakirti Joshi, underscores the vast opportunities in both manufacturing and services sectors to cater to both domestic and global demand. Joshi projects robust growth rates of 9.1 percent for manufacturing and 6.9 percent for services between fiscal 2025 and 2031, with services retaining its dominant position as the primary driver of India's growth.
