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India is well-positioned to emerge as one of the world's most powerful growth engines over the next two decades, driven by its leadership in information technology services, rapid digitalization, strong entrepreneurship, and favourable demographics, according to a recent EY report on India's long-term economic prospects.
The report highlights India's status as the world's information technology and services hub, noting that the country has a unique opportunity to become the "office of the world" for global corporations. What began as a cost-arbitrage model has evolved into a high-value proposition, with India increasingly providing advanced digital engineering, consulting, product development and innovation-led services to multinational companies. A key force multiplier for this growth trajectory is India's digital public infrastructure. Widespread adoption of digital platforms has significantly reduced the cost of doing business, improved efficiency and transparency, and accelerated the formalization of the economy. The report noted that this infrastructure has also deepened financial inclusion and unlocked new business opportunities across sectors, giving India a distinct competitive advantage among large economies. Addressing the country's credit gap is identified as another critical lever to sustain high growth. The report highlighted that accelerated credit growth, along with the development of a deeper corporate bond market, can boost consumption by expanding access to personal credit while simultaneously providing long-term capital for investments in manufacturing and infrastructure. This, in turn, would help fuel demand and expand productive capacity across the economy. India's thriving entrepreneurship ecosystem, supported by strong flows of private capital, is also expected to play a central role. Rapid digitalization and increased availability of venture and private equity funding have led to a spurt in new-age companies across technology and other sectors. The report stated that this wave of entrepreneurship will be instrumental in delivering differential growth and driving innovation-led expansion in the coming years. Demographics remain one of India's strongest structural advantages. The report projects a six-fold increase in per capita income by 2047 for a population of more than 1.7 billion people, a transformation that is expected to unleash an unprecedented consumer boom. A young, expanding workforce combined with rising incomes is likely to make India one of the fastest-growing consumer markets globally. On the supply side, making domestic manufacturing globally competitive is seen as a strategic priority. Success in complex, high-value and emerging sectors would position India as a manufacturing hub serving both domestic and international markets, strengthening its role in global value chains. Infrastructure development is another cornerstone of the long-term outlook. The report sets a target of reducing logistics costs from the current 14-18 per cent of GDP to the global best practice level of around 8 per cent by 2030, which would significantly enhance competitiveness and productivity. However, the report cautioned that while these growth drivers and enablers underpin India's rapid economic rise, certain areas require continued policy attention to most effectively accelerate the growth curve and sustain momentum over the long term. (ANI)
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