Report: 347 lakh crores needed to raise for the developed India target, rapid expansion of the financial sector necessary
New Delhi| The domestic banking sector will need to raise capital of Rs 347.3 lakh crore ($4 trillion) over the next two decades to achieve India’s target of a developed economy by 2047. The HSBC Mutual Fund report said that India will have to grow financial and banking assets at a much faster pace than GDP to achieve its ambitious target. Indian GDP is projected to grow nearly 9 times to reach $3 million million by 2047 compared to $3.4 trillion in 2023. To support this economic expansion banking assets must grow 14.5 times to reach $4.5 trillion by 2047, currently valued at $3.1 trillion.
Raising capital of $4 trillion in the banking sector will help in creating a multiplier effect. This will promote trade, investment, industrial development and infrastructure development. A strong banking system will also boost global confidence in the Indian economy, attracting more foreign investment.
According to the report, the well-developed financial sector plays an important role in supporting economic growth by providing credit, investment and other financial services. India’s financial sector will have to expand significantly to compete with other major economies. Therefore, financial assets will have to increase 19-fold to reach the $12 million million level by 2047, valued at $6.4 million million in 2023.
Currently, the US leads the world with financial assets of $1.35 trillion. China is in second place with $78 trillion and Germany is in third place with financial assets of $21 trillion. India’s financial sector is currently very small compared to these countries, but it will need to grow rapidly to meet the country’s economic ambitions.
According to the report, the size of Indian GDP could almost double to reach $7 trillion by 2030. However, maintaining high growth for the next two decades will be the real challenge. If India expands its financial sector at the expected pace, it will not only reach the GDP target of $3 million million, but will also become a major player of the global economy by 2047.
