India Likely To Become $7 Trillion Economy By 2030: Deutsche Bank

By 2030, India is about to grow two and half times to $7 trillion from about $3 trillion now to become the world's third-largest economy, says a research report. Deutsche Bank in its research report 'Imagine 2030' said that a nominal GDP (gross domestic product) growth is likely to average just over 10 percent through the next decade.

However, it also said that India may fail to meet its potential like it did in the last decade after a sharp slowdown in the recent years.

"Despite its promise over the last decade, the Indian economy has slowed down sharply in recent years. That has led some to predict the decade ahead will be one of lower growth and frustration that India's enormous potential will, yet again, go unfulfilled," the report said.

The report believes that recent measures taken by the government will help push growth.

"For starters, to offset the demand slowdown, the government took the bold decision in September (2019) to meaningfully cut the corporate tax rate. This will likely incentivise greater foreign direct investment flow into the country and support private investment in the economy, which has remained weak over the last eight years," the report said.

The Reserve Bank of India's decision to cut repo rates will also help with the revival. Further, reforms like demonetisation (that brought faster digitisation in the banking system) and GST will expedite formalisation of the economy in the new decade.

"As economies with significantly higher informal sector employment, such as India, typically have lower per capita income, policies which are aimed at the greater formalisation of the economy should help to accelerate per capita income levels," the report added.