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India Needs Rs.1094 Lakh Crore for 8-9% Annual Growth by 2036: SBI Chairman


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India requires ₹1,094 lakh crore in investments to achieve an average annual growth rate of 8-9% by 2036, as outlined in the government’s Viksit Bharat plan, according to State Bank of India (SBI) Chairman CS Setty.

Breakdown of Investment Sources

Setty highlighted that ₹323 lakh crore must come from banks, while ₹643 lakh crore will need to be mobilized through the equity markets. He emphasized that investors must shift their focus from derivative markets to spot transactions to enhance market depth and liquidity.

“For the first phase of the Viksit Bharat plan, which extends up to 2036, we aim for an average growth rate of 8-9%. To achieve this, the investment rate must rise to 35% by 2036, which is 2 percentage points higher than the current levels in 2024. Additionally, domestic savings rates need to increase by at least 3.5 percentage points to 33.5% to keep the current account deficit (CAD) at around 1.5% of GDP,” Setty stated during his keynote address.

Vision for 2047

The government’s long-term goal is to transform India into a $30 trillion economy by 2047, coinciding with the country’s centenary of independence. This vision includes achieving a per capita income of $18,000 annually, ensuring India avoids the middle-income trap and maintains a sustained growth rate of 7-10% over the next 20-30 years.

To meet these targets, India’s GDP must grow ninefold from its current $3.36 trillion, and per capita income must increase eightfold from $2,392. According to the World Bank, countries with a per capita income of at least $14,005 are categorized as high-income economies.

Capital Market Requirements

Setty explained that India’s capital markets must absorb an additional 3.5% of GDP in annual savings beyond current inflows. “On the demand side, achieving a higher investment rate of 35% will require at least ₹127 lakh crore in corporate bonds. At a conservative credit-to-GDP ratio of 75%, banks will need to provide ₹323 lakh crore in cumulative funding,” he said.

He further noted that external financing sources must align with a 70% debt-to-equity ratio, necessitating equity mobilization of ₹643 lakh crore by 2036 to support growth.

Need for Market Depth and Liquidity

Setty emphasized the importance of enhancing the equity market’s depth and liquidity to meet these financial goals. He cautioned against over-reliance on derivatives and called for mechanisms that prioritize open offers over private placements.

The ambitious targets outlined in the Viksit Bharat plan underscore the need for robust financial systems, higher domestic savings, and strategic investments to propel India into the league of developed nations.

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