Even as India cheers Moody’s credit rating upgrade and the recent boost from the 30 places jump in ease of doing business, top banker Uday Kotak says the nation will soon repeat the similar success on another frontier, by matching a five times bigger China in terms of GDP per capita. “I think it is doable. In addition to the hard stuff, India needs to do a lot of the soft stuff,” Uday Kotak told CNBC TV18 on the sidelines of an event. “If I look at China and India, in the last 20 years, India has grown at 5.5%, and our per capita GDP is at about $1,800. China is about 5 times our size. India needs to grow at about 8% per annum in per capita GDP for the next 20 years to reach China’s level. If you take a population growth of 1-1.2%, for the next 20 years we must grow at 9% to reach the current GDP of China,” Uday Kotak said, laying threadbare the hard work required to get there.
The Vice Chairman and MD of Kotak Mahindra Bank says that India must focus on improving quality of its infrastructure. “I think India has come a long way, but the road ahead is even more interesting and challenging. For a country to be a truly developed country, it’s not that the poor have cars, it’s that the rich use public transport. That’s something we must do, how do bring the level of infrastructure and its quality, and the softer aspects have really got us there.”
India is likely to be the world’s fastest-growing large economy in the next 10 years, driven by digitisation, favourable demographics, globalisation and reforms, predicts a recent Morgan Stanley report. According to the global financial services major, the trend line in India’s annual GDP growth has been accelerating to 6.9 per cent in 2000s, from 5.8 per cent in the 1990s, and this momentum is likely to continue in the next decade as well. Morgan Stanley expects digitisation will provide a boost of 50-75 bps to GDP growth and forecast that India will grow to a $6-trillion economy and achieve upper-middle income status by 2026-27. “We think India’s stock market could be among the world’s best performers in the next 10 years, leading to India’s market cap rising from around $2 trillion to around $6 trillion,” the report stated.