Will India’s GDP Surge by 6.8% Annually Over the Next Three Years?
Click to start listening
Synopsis
According to S&P Global, India's economy is projected to grow at an impressive rate of 6.8% annually over the next three years. This growth is attributed to fiscal consolidation and strategic infrastructure investments, enhancing India's standing amidst global economic challenges.
Key Takeaways
- India's GDP is expected to increase by 6.8% annually for the next three years.
- Fiscal consolidation is a priority for the government.
- Infrastructure investment is set to rise to 3.1% of GDP by fiscal 2026.
- Inflation targeting has stabilized expectations.
- Public investment in infrastructure is projected at 5.5% of GDP.
New Delhi, Aug 14 (NationPress) India continues to stand out as one of the top-performing economies globally, and S&P Global anticipates that the growth dynamics will persist in the medium term, projecting a 6.8 percent annual increase in GDP over the next three years.
The country is focusing on fiscal consolidation, showcasing the government's commitment to achieving sustainable public finances while simultaneously advancing its robust infrastructure initiatives.
The ratings agency forecasts a real GDP growth of 6.5 percent for this year, which is competitive compared to other emerging markets amid a widespread global slowdown.
A strong economic expansion is positively impacting India’s credit metrics, and S&P Global expects solid economic fundamentals to support growth momentum in the coming two to three years. Furthermore, the current monetary policy environment is increasingly favorable for managing inflation expectations.
In the last five to six years, the quality of government spending has notably improved. The current government is directing more budgetary resources towards infrastructure development. The capital expenditure (capex) of the Union government is projected to rise to INR 11.2 trillion, approximately 3.1 percent of GDP, by fiscal year 2026.
This marks an increase from just 2 percent of GDP a decade ago. When including capital spending by state governments, total public investment in infrastructure is estimated to be around 5.5 percent of GDP, comparable to or exceeding that of its sovereign counterparts.
S&P Global believes that enhancements in infrastructure and connectivity will eliminate bottlenecks that currently impede long-term economic growth.
The shift to an inflation-targeting monetary policy has yielded positive results. Inflation expectations are now more stable than they were ten years ago. Between 2008 and 2014, India's inflation frequently hit double digits.
Over the past three years, despite fluctuations in global energy prices and supply-side disruptions, CPI growth has averaged 5.5 percent. In recent months, it has consistently remained within the lower range of the Reserve Bank of India's (RBI) target of 2 percent to 6 percent.
These advancements, together with a robust domestic capital market, indicate a more stable and favorable environment for monetary policy.
Point of View
I believe that India's commitment to fiscal discipline and infrastructure development is essential for sustaining its economic growth. The projections from S&P Global highlight the resilience of India's economy even amid global uncertainties, reinforcing the need for continued investment in key sectors.
NationPress
10/09/2025
Frequently Asked Questions
What is the projected GDP growth rate for India?
India's GDP is projected to grow at a rate of 6.8% annually over the next three years, according to S&P Global.
What factors are driving India's economic growth?
Key factors include fiscal consolidation, infrastructure investment, and improved monetary policy settings.
How does India's GDP growth compare to emerging markets?
India's projected GDP growth of 6.5% this year is favorable compared to its emerging market peers amid a global slowdown.
