India Will Grow At 8-10% For Next 10 To 20 Years: Deloitte CEO South Asia

Deloitte South Asia CEO Romal Shetty on Monday spoke on the burgeoning potential of India as a global economic powerhouse and urging investors to seize the opportunities presented by its rapid growth trajectory.

Addressing an audience that included distinguished leaders from various industries and government officials at at World Trade Centers Association Global Business Forum 2024 event, Shetty reflected on India's historical significance as a dominant force in the global economy centuries ago. He stressed on the country's remarkable revival. He said, "India is experiencing a revival of its economy, reminiscent of its preeminent position globally."

Drawing attention to India's recent economic performance, Shetty cited the current growth figures. "India has been growing at about 7 per cent to 7.5 per cent over the last two years, with the recent quarter reaching 8.4 per cent." 

He projected continued robust growth of 8 per cent to 10 per cent in the coming decades, with the goal of achieving developed country status by 2047.Source: Ministry of Statistics and Program Implementation (MOSPI), Centre for Monitoring Indian Economy (CMIE), Deloitte Research 

"If you look at all the macroeconomic indicators, India is probably is going to grow at 8-10 per cent for the next 10-20 years, we hope. And by 2047, of course, we are going to be a developed country." - Deloitte South Asia CEO Romal Shetty

Shetty reiterated the importance of investing in India and said, "Deloitte's been a hundred years in this country. It is the age of India and I think it's important to invest in India." 

"Karnataka Will Be Heart Of India's Growth"

Shetty also spoke on the critical role of Karnataka, particularly Bangalore, as a prime investment destination within India. The Deloitte CEO also spoke on the importance of favourable climate conditions for investment attractiveness, noting that the weather remained a top factor for multinational corporations setting up operations in the region.

Speaking on Karnataka's strengths, Shetty outlined key factors contributing to its appeal for investors. He noted the state's cutting-edge talent, citing professional colleges in Bangalore as "absolutely top-notch." Additionally, he underlined Karnataka's status as the fourth-largest technology hub globally, positioning it as a key player in emerging sectors such as artificial intelligence (AI) and generative AI.

According to a Deloitte report launched at the GBF event, in the last ten years, there has been a big shift in the sectors contributing to the Gross State Domestic Product (GSDP). Specifically, there has been a decline in the contribution of the secondary sector, while the tertiary sector has seen an increase. 

Source: Haver Analytics, Deloitte Research 

The share of the secondary sector's contribution to the GSDP has decreased by approximately 8 per cent, while the tertiary sector's share has risen from 51.8 per cent in FY12 to 58.7 per cent in FY23. This shift is largely attributed to the growth of the state's IT services sector and other technology-driven industries. Additionally, there has been a slight increase in the contribution of the primary sector, from 13.2 per cent in FY12 to 14.8 per cent in FY23.

Speaking during the event, M.B. Patil, Minister for Medium and Large Industries, Infrastructure Development, Karnataka said, “Karnataka aims to become USD 1 trillion economy by 2032 by growing at a sustained growth rate of 18 per cent. Our Industrial Policy for the period 2020-25 provides multiple financial incentives to create favourable economics for investors. Further, we will soon bring in a new clean mobility policy that aims to position Karnataka as the premier destination for Electric Vehicle (EV) manufacturing.”

However, the Deloitte report opined that the Karnataka government will need to focus on 12 key sectors to reach its target of becoming a USD 1 trillion economy. These sectors will enable the state to follow a path of rapid growth and development. Meawhile, as industrialisation picks up speed, the government will have to allocate resources and land in a way that balances the needs of farmland and industry. 

The report noted that the state must also ensure improved ease and cost of doing business and address infrastructure issues, such as traffic congestion in Bengaluru. 

“Karnataka will have to prioritise implementing the right policy frameworks, attracting the right investments in growth areas, and ensuring an improved tax and regulatory environment in key growth areas. It will be important to focus on regionally balanced growth, and the state will have to rely on technology for better governance and policy-making. These must unavoidably address Karnataka’s challenges while maximising its comparative advantages.” - Deloitte's 'Karnataka: Powering India's growth' report 2024

The Deloitte report also mentioned that Public-private partnerships will be vital for mobilising resources and expertise in the years to come in Karnataka.