India's aspiration to reach a $30 trillion GDP by 2047 necessitates a 20-fold expansion in the financial services sector, with banks assuming a crucial role, according to a prominent global consultancy. Boston Consulting Group (BCG) underscores the necessity for banks to drive this growth in India's predominantly bank-centric economy, requiring a $4 trillion capital base, with a third of this needing fresh capital.
“Despite the challenges, India's banking system is currently robust, characterized by high profitability, strong capital adequacy, and low non-performing assets (NPAs),” BCG stated in a report jointly released with FICCI and the Indian Banks’ Association. Economists and business leaders are optimistic about India achieving a $30 trillion economy by 2050. Adani Group chairman Gautam Adani noted that with the third-largest Asian economy set to add a trillion dollars to its GDP every 18 months over the next decade, this goal is attainable.
Adani highlighted that post-Independence, India took 58 years to reach its first trillion dollars of GDP, 12 years for the next trillion, and just 5 years for the third. “I foresee that in the coming decade, India will start adding a trillion dollars to its GDP every 18 months, positioning us to become a $30 trillion economy by 2050. This growth trajectory will unlock immense opportunities for all,” Adani said.
The BCG report, titled “Banking for a Viksit Bharat,” emphasizes that transforming the financial sector over the next two decades will necessitate structural changes, including increasing deposits, improving asset quality, and advancing digital capabilities. MV Rao, Chairman of the Indian Banks’ Association, stressed the significance of innovative deposit strategies to promote inclusion and credit growth, and the importance of leveraging digitization and emerging technologies like GenAI.
“To boost inclusion and credit growth, we must innovate and reimagine our deposit strategies, aligning them with our customers’ evolving needs. This growth will be facilitated by fully utilizing our workforce’s potential through digitization and emerging technologies like GenAI,” Rao stated. Jyoti Vij, Director General at FICCI, noted that while India’s digital public infrastructure offers a solid base, future efforts must concentrate on enhancing climate and cybersecurity resilience, real-time networks, and specialized talent to ensure the banking sector’s success in making India a developed nation.
Ruchin Goyal, Managing Director and Senior Partner at BCG and co-author of the report, observed that India’s journey towards a $30 trillion economy by 2047 is ambitious yet feasible. It requires a transformation in the financial services sector, with banks leading the charge. “India’s banking system is currently strong, serving as a springboard for the Viksit (developed) Bharat mission. It must prepare for the next two decades through structural shifts—growing deposits, enhancing asset quality, and improving productivity while advancing digital capabilities and future competencies,” he concluded.
