India’s Banks Require USD 4 Tn Fresh Capital To Power ‘Viksit Bharat’ Vision: HSBC Report

New Delhi, Feb 11 (KNN) India's banking sector will require USD 4 trillion in fresh capital over the next two decades to support the nation's ambitious goal of becoming a developed economy by 2047, according to a comprehensive report released by HSBC Mutual Fund.

This substantial capital requirement is deemed essential to facilitate India's transformation into what the government terms ‘Viksit Bharat’ or developed India.

The report emphasises that India's financial and banking sectors must expand at a pace that significantly outstrips GDP growth to achieve these development objectives.

While India's current GDP stands at USD 3.4 trillion, projections indicate a nearly nine-fold increase to USD 30 trillion by 2047.

To support this massive economic expansion, the country's financial assets must grow from their current value of USD 6.4 trillion to approximately USD 120 trillion, representing a nineteen-fold increase.

Banking assets are expected to follow a similar trajectory, expanding from USD 3.1 trillion to USD 45 trillion.

The scale of this financial transformation becomes apparent when compared to other major economies. The United States currently leads with USD 135 trillion in financial assets, followed by China with USD 78 trillion and Germany with USD 21 trillion.

For India to achieve its development goals, its financial sector must rapidly expand to comparable levels, with the banking sector playing a pivotal role in this growth story.

The HSBC report suggests that this substantial capital injection will create a multiplier effect, fostering business investments, industrial growth, and infrastructure development.

A robust banking system is expected to enhance global confidence in India's economy, potentially attracting increased foreign investment.

The report also projects a more immediate milestone, suggesting India's GDP could reach USD 7 trillion by 2030, though maintaining sustained high growth throughout the following decades remains a significant challenge for the nation's economic planners.

(KNN Bureau)