New Delhi, July 23
A Morgan Stanley report on Wednesday said it expects India’s economy to be the third-largest globally by 2028 and more than double in size to $10.6 trillion by 2035.
Embedded in this forecast is the likelihood that three to five states (Maharashtra, Tamil Nadu, Gujarat, Uttar Pradesh and Karnataka) will have an economy of nearly $1 trillion each, ranking in the top 20 global economies between 2030 and 2035, the report projected.
"Based on the latest data, the top three states are Maharashtra, Gujarat and Telangana. The states showing significant improvement in ranks over the past five years are Chhattisgarh, Uttar Pradesh and Madhya Pradesh,” the report noted.
India will drive a fifth of global growth in the coming decade and become essential to earnings growth for many multinational companies.
“To secure this outcome, among other things, the role of India's 28 states and eight Union Territories is critical. States not only play a pivotal role in fiscal management but also compete for investments by creating suitable policies and incentives, easing business conditions (ultimately, a business or factory is set up in a particular state),” said economists from the global financial institution.
They have independent political cycles with varying mandates that can affect growth positively or negatively and are empowered by law to control factors of production.