Will India Become the 3rd Largest Economy by 2028?

New Delhi, July 23 (NationPress) A recent report by Morgan Stanley indicates that India is poised to become the third-largest economy in the world by 2028, with a projected growth that will see its economic size more than double to $10.6 trillion by 2035.

This prediction includes the potential for three to five states—namely Maharashtra, Tamil Nadu, Gujarat, Uttar Pradesh, and Karnataka—to each have economies nearing $1 trillion, placing them among the top 20 global economies from 2030 to 2035.

According to the latest data, the leading states currently are Maharashtra, Gujarat, and Telangana. Over the past five years, states like Chhattisgarh, Uttar Pradesh, and Madhya Pradesh have shown remarkable improvements in their economic rankings.

India is projected to contribute one-fifth of global growth in the upcoming decade, becoming vital for the earnings of many international corporations.

The report emphasizes the importance of India’s 28 states and 8 Union Territories in achieving this economic outcome. These states play a significant role in fiscal management and compete for investments by creating conducive policies and incentives that facilitate business operations.

Each state operates under its political cycles, which can positively or negatively impact growth, and they have the legal authority to regulate production factors.

The success of India's competitive federalism will be a crucial determinant in whether the nation transforms into a global manufacturing hub, potentially doubling its per capita income within the next seven years and sustaining strong stock market growth.

As India moves toward a $10.6 trillion economy by 2035, the economic influence of states becomes paramount, with significant political and legislative power that can shape India’s emergence as a global manufacturing leader.

In the last decade, there has been a robust focus on developing physical infrastructure, with the Central government increasing its capital expenditure from 1.6% of GDP in FY2015 to 3.2% of GDP in FY2025. This has resulted in substantial infrastructure advancements across states.

Key infrastructure indicators show a 60% increase in highways, a doubling of airports, and a quadrupling of the metro network. Major infrastructure initiatives led by the Central government, including PM Gati Shakti, National Infrastructure Pipeline, Bharatmala, Sagar Mala, and UDAN, have been launched alongside state-specific projects.

States collaborate with the Central government on these initiatives and play an integral role in planning and execution. Additionally, state governments are responsible for investments in crucial sectors such as power, water, and urban development, as highlighted in the report.