Expand India's Economy But Not As An End In Itself

Our robust macro data hides a disquieting micro story that should be addressed in 2024. The government and central bank ought to ensure that faster growth is more equitable too

In the last week of 2023, India's share in global market capitalization hit a record 3.8%, according to Bloomberg data, consolidating the country's position as the fifth biggest equity market, just behind Hong Kong. In nominal terms, India's GDP is also the world's fifth largest (by purchasing power parity, or PPP, it is the third largest). According to the International Monetary Fund (IMF), India will move into fourth place in 2025 and reach the third spot in 2027, with a projected economy of $5.4 trillion. Some might see this parallel between GDP and stock markets as further vindication of the IMF's "star performer" tag. Indeed, we have seen a reiteration of faith in the Indian economy by domestic and overseas investors, both of whom have been pouring money into our capital markets.