India’s huge domestic market makes it less vulnerable to external economic shocks, according to Aurelien Kruse, Lead Economist at the World Bank. In an exclusive interview with ANI, Kruse highlighted the country’s economic strength lies in its scale, resilience, and demographic advantage. India’s large and growing market provides a buffer against global volatility, making it an attractive destination for investors.
## India’s Economic Resilience
Kruse emphasized that India’s favourable demographics will continue to support strong growth in the coming decades. The country’s working-age population is expected to keep growing until around 2050, with a favourable dependency ratio. This demographic advantage is a significant asset for India and will drive growth. The World Bank and IMF are consistent in their forecast that India will remain the fastest-growing large economy in the world.
## Key Drivers of India’s Growth
India’s strong fundamentals, including a large labour force, growing capital stock, and steady productivity, underpin its growth outlook. Kruse noted that the country is expected to grow between 6.3 and 7 percent over the foreseeable future. However, he also highlighted that the real challenge for India is to accelerate beyond this baseline growth rate. To achieve higher growth, India needs to focus on productivity, efficiency, and integrating into global value chains.
### Leveraging Digital Innovation
India’s growing digital and innovation ecosystem is driving productivity and positioning the country as a hub for innovation. Kruse pointed out that India’s capabilities in digital domains and global capability centres are feeding into the economy’s productivity. This trend is expected to continue, supporting India’s growth story.
## Global Trade Environment
Kruse downplayed fears of major disruption in the global trade environment. While COVID-19 highlighted vulnerabilities in global integration, trade is still growing, albeit at a slower pace. Kruse argued that India should be more open to the world, leveraging its advantages and cards in hand. The country’s progress is evident, with growth rates of 6-7 percent indicating that it is on the right track.
## Path to Viksit Bharat
The World Bank’s India Economic Memorandum proposes measures to help India achieve its Viksit Bharat goal. Kruse emphasized that India’s next challenge is to move from “good to great” by focusing on productivity, efficiency, and global integration. By doing so, India can achieve higher growth rates and realize its full potential.
In conclusion, India’s economic strength lies in its scale, resilience, and demographic advantage. With a large and growing domestic market, favourable demographics, and a growing digital ecosystem, India is well-positioned to maintain its growth momentum. By focusing on productivity, efficiency, and global integration, India can accelerate its growth and achieve its Viksit Bharat goal. As the global economy continues to evolve, India’s resilience and adaptability will be crucial in navigating the challenges and opportunities that lie ahead.
