RBI Deputy Governor's BIG prediction: India can become world's largest economy by 2060

By Aishwarya Nair | First Published Jul 13, 2024, 4:42 PM IST

RBI Deputy Governor Michael Patra predicts India could become the world's second-largest economy by 2031 and the largest by 2060, a decade earlier than expected.

According to RBI Deputy Governor Michael Patra, India has the potential to experience rapid economic growth, surpassing expectations and becoming the world's second-largest economy by 2031, and possibly even the largest economy by 2060, a decade earlier than predicted.

In his address titled, "Future Readying India's Monetary Policy," at the Lal Bahadur Shastri National Academy of Administration in Mussoorie, Michael Patra highlighted that the Organisation for Economic Cooperation and Development (OECD) anticipates India will surpass the US to become the world's second-largest economy in PPP terms by 2048, according to existing projections.

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However, he believes this could happen even sooner—within the next seven years. Patra pointed out India's inherent strengths and determination to reach its ambitious goals. He noted that China's ascent to becoming the world's second-largest economy began in the early 1990s. Nonetheless, he emphasized that India's era commenced in 2010, with various factors aligning to enable India to emerge as a global leader in the next two to three decades.

According to Michael Patra, India's growth will be driven by several key factors. These include:

1. Robust investment, backed by domestic savings, and a stable external debt position.

2. Effective monetary policy and inflation management, which have achieved macroeconomic stability and bolstered growth prospects.

3. A healthy banking sector and ongoing fiscal consolidation, which further reinforce stability.

4. India's demographic advantage, characterized by a young and growing workforce, promising sustained growth.

5. The country's digital revolution, which is transforming the economy and positioning India as a global leader in leveraging digital technologies for growth.

He stated that if India can sustain a growth rate of 9.6% per annum over the next decade, the country is projected to escape the lower middle-income trap and achieve developed economy status. "These gains need to be reflected in per capita income with two milestones: a per capita income level of US$ 4,516-14,005 to reach middle-income country status, and surpassing that level to attain the position of a developed country today," he said.

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