India's Economic Reforms Set Stage For 'Self-Sustaining' Expansion: Franklin Templeton Report

New Delhi, Dec 29 (KNN) India is poised to undergo a period of 'self-sustaining' expansion, driven by reforms that have established a cycle of growth, as per a report by the global investment firm, Franklin Templeton.

The report anticipates the possibility of achieving an annual nominal Gross Domestic Product (GDP) growth rate of up to 10 per cent in the approaching decade.

Highlighting the potential impact of recent government-led reforms, the financial firm, in its report, asserted that the reforms undertaken by the government possess the capacity to elevate India to a status akin to that of the United States and China by the year 2035.

The report projects India's potential membership in the prestigious USD 10 trillion GDP club.

Franklin Templeton identifies three key drivers of growth in India, emphasising (i) broad-based infrastructure and manufacturing investment, (ii) a persistent shift from unorganised to organised economic activities, and (iii) enhanced political and economic stability.

"Broad-based infrastructure and manufacturing investment has joined consumption as growth drivers," said Franklin Templeton.

Services exports are expanding and deepening, incorporating global capability centres focused on accounting, marketing, and human resources, the report added.

A sustained transition from unorganised to organised economic activities is underway, driven by prior reforms that integrate more labour into the organised economy, diminishing the allure of cash-based transactions, as highlighted by the report.

"There is more political and economic stability with low inflation and a sustained reduction in the current account and fiscal deficit. The government has recognised its role in kick-starting a new industrialisation process to leverage opportunities from Make In India, the diversification of global supply chains and the green transition," stated the report.

The investment firm points out the manifold benefits derived from structural reforms, including the Insolvency and Bankruptcy Code (IBC), Goods and Services Tax (GST), and digitisation through Aadhaar and Jan Dhan.

These reforms, the report noted, are seen as catalysts for increased entrepreneurship, with recent graduates expressing interest in joining start-ups that leverage the India Stack and opportunities associated with Make in India.

(KNN Bureau)