India's Path to Global Economic Domination by 2060: Insights from RBI Deputy Governor

India's potential to become the second-largest economy by 2031 and the largest by 2060 was highlighted by Reserve Bank Deputy Governor Michael D Patra. However, addressing challenges in labor productivity, infrastructure, manufacturing's GDP contribution, and sustainable development is crucial. Patra stressed the role of monetary policy in achieving these goals.

India could become the second largest economy by 2031 and the world's largest by 2060, leveraging its innate strengths, according to Reserve Bank Deputy Governor Michael D Patra. Speaking to Indian Administrative Service officials in Mussoorie, Patra emphasized overcoming challenges in labor productivity, infrastructure, and manufacturing's GDP contribution while greening the economy for sustainable development.

Patra projected India could break free from the lower-middle-income trap by growing at 9.6% annually over the next decade. Achieving a per capita income of USD 4516-14,005 would shift India to middle-income status and reaching USD 34,000 by 2047 would mark it as a developed nation. He also remarked on the volatility of current exchange rates and suggested using purchasing power parity (PPP) for cross-country comparisons. According to PPP, India is already the third-largest economy globally with a projected GDP of USD 16 trillion by 2027, surpassing the US by 2048.

India's monetary policy, Patra stated, aims to stabilize prices and align aggregate demand with the economy's productive capacity. This policy will bolster the rupee's value and lay the groundwork for India's rise as a global economic powerhouse. He highlighted the need for convergence with global inflation to preserve the rupee's value, setting the stage for its internationalization.

(With inputs from agencies.)