The distinction of being the most populated country with a sixth of the world’s working population could only lift the prospects for the economy to surpass Germany and Japan by 2027, RBI said, citing an International Monetary Finance forecast.
“In closing, 2023 may well be the opening ajar of a window in which India’s time on the world stage is arriving,” RBI said in its commentary.
In April 2023, India’s population will be the largest in the world, projected at 1.4 billion. “With a median age of 28, this is India’s chance to seize the demographic dividend and herald its emergence as an economic powerhouse of the future,” RBI said.
India will be a $3.7 trillion economy in 2023, maintaining its lead over the UK as the fifth largest economy of the world.
“Even diehard disparagers acknowledge that ‘India has a compelling story – a vibrant IT-services industry, a burgeoning domestic tech economy, an increasingly attractive location for global manufacturers and strong economic growth,” said the report, prepared by the central bank’s economic research department.
RBI however maintains that the views expressed in the report are of the authors and not of the bank.India’s macroeconomic stability is getting stronger with inflation, measured by consumer price index, was seen below the 6% upper tolerance band for the past two months. Lead indicators also suggested that the current account deficit is on course to narrow through the rest of 2022 and 2023.
India is also striving to build a global manufacturing hub and a preferred habitat for companies to shift their production bases.
“Amid the ongoing megatrends, India would have a significant advantage owing to strong domestic demand, digitalization, largest talent pool globally, financial inclusion, global competitiveness, and sustainability transition,” EY, one of the leading professional services organizations, said earlier this week.
The RBI report said that the objective during 2023 would be to tether inflation and fiscal consolidation at both central and sub-national levels.