Morgan Stanley: Morgan Stanley confident on India's progress, GDP will improve further

Morgan Stanley: Morgan Stanley confident on India's progress, GDP will improve further

Growth of India: Morgan Stanley has said that India's economic growth rate is happening due to increase in investment. This is very close to touching the figure of 2003-07. During that period, India's economic growth rate was above 8 percent on an average. Morgan Stanley said in its report on Sunday that investment in GDP was declining in the last decade. But India has dealt with it well by increasing capital expenditure and has taken strong steps towards economic progress. 

The situation remains the same as in 2003-07

Morgan Stanley's report says that there is still more scope to increase capital expenditure. Therefore the conditions remain similar to those of 2003-07. Indian GDP is currently getting major support due to increasing consumption, public capital expenditure, private capital expenditure, increasing demand in cities as well as villages, increase in global exports and low risk. According to economists at Morgan Stanley, the investment to GDP ratio increased from 27 percent to 39 percent between 2003-07. Something similar can still be seen. 

Indications of further increase in investment 

There was a decline in the investment to GDP ratio in the decade from 2011 to 2021. Now it has again reached 34 percent of GDP. Morgan Stanley has expressed hope that it may increase to 36 percent by financial year 2027. Due to the surge in capital expenditure during the year 2003-07, employment had increased and income had increased. During this period, GDP growth rate averaged 8.6 percent and headline CPI inflation averaged 4.8 percent. 

Private companies will also increase their expenses 

The report says that the corporate sector has faced many shocks in the last few years. This has adversely affected their ability to invest. This also includes Covid 19. But now initial signs of a pick-up in private capital expenditure are being seen. Private consumption is also currently weaker than before Covid 19. This figure was 3.5 percent in the December quarter, which is less than the pre-Covid 2017-18 average of 6.5 percent. There will be further improvement in this. Increase in capital expenditure increases employment and also improves the spending power of the people.

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