Medium Term Growth in India to Remain Undisturbed: IHS Markit

A study published by IHS Markit has projected that the medium-term growth outlook for India is to remain favourable, even though the gross domestic product will tumble in the current financial year due to the coronavirus-induced recession in the country.

The outlook is because of the large and fast-growing middle class in India that will help ramp up the total consumer spending in the country. The consumer spending in India is expected to grow by around 42% between 2020 and 2025.

IHS Markit Study has also forecast that the consumption expenditure in the country will double from $1.6 trillion in 2020 to $3.2 trillion by 2030, if it is measured in constant prices and it will be accompanied by strong average annual GDP growth and rapidly rising per capita income for the fast-growing middle-class urban households in the country.

The report has also pointed that by the year 2030; around 1.1 billion Indians will have internet access which is actually more than double the user base of 500 million in 2020. E-commerce is also supposed to grow at a very fast pace and the shift from 4G to 5G smartphones will be beneficial for the home-grown players such as Snapdeal, Delhivery, etc.

The agency has predicted a contraction of 6.3% in the FY21 for the GDP in India as the June quarter is going to see the worst numbers in the last few decades. However, it is also correct that the Indian economy will rebound pretty fast once the epidemic subsides with growth picking up momentum in the second half of 2020 and positive GDP growth of 6.7% in the FY2022.

Month: Current Affairs - July, 2020