Now Reading: India needs 18% annual dollar growth to hit $20 tn target
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India needs 18% annual dollar growth to hit $20 tn target
India needs to sustain around 18% annual growth in dollar terms to become a $20 trillion economy by 2036, according to a report from Equirus Securities. The report highlights a gap in…
The Story in Brief
India needs to sustain around 18% annual growth in dollar terms to become a $20 trillion economy by 2036, according to a report from Equirus Securities. The report highlights a gap in the corporate bond market, which is only 18% of GDP compared to equity market capitalisation of 130% of GDP.
Bringing the corporate bond market closer to China's scale could unlock an additional Rs 54 trillion in financing capacity. Such reforms could reduce borrowing costs by Rs 2.2 lakh crore annually and add 0.9-1.3 percentage points to growth. Equirus also flagged the need for rupee stability and continued foreign investor support.
The Indian Opinion
The report rightly flags India's over-reliance on equity markets while its corporate bond market lags far behind China's. The narrative that domestic liquidity alone can drive the next leg of growth ignores the huge primary issuance pipeline and the need for foreign capital. Tax parity between bonds and equities sounds sensible, but will the government risk the revenue from securities transaction tax, which exceeded Rs 40,000 crore in FY26? Without a serious push to deepen the debt market, the $20 trillion target may remain a stretch.
Source: bfsi.economictimes.indiatimes.com
This story was synthesised by AI from the source linked above.
