India’s ambition to achieve a $30 trillion GDP by 2047 will require a 20-fold expansion in the financial services sector, with banks playing a pivotal role, a leading global consultancy said.
Boston Consulting Group (BCG) has highlighted the need for banks to anchor this growth in India’s predominantly bank-led economy, necessitating a $ 4 trillion capital base, one-third of which will need fresh capital.
“Despite this challenge, India’s banking system is currently well-positioned with high profitability, robust capital adequacy, and low non-performing assets (NPAs),” BCG said in a report released in collaboration with FICCI and the Indian Banks’ Association.
Economists and business leaders are upbeat about the prospects of India becoming a $30 trillion economy by 2050. With the third-largest Asian economy poised to add a trillion dollars to its GDP every 18 months in the next decade, it would be achievable, Adani Group chairman Gautam Adani has said.
Adani said that after 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 anticipate that in the next decade, India will begin adding a trillion dollars to its GDP every 18 months putting us on track to become a $30 trillion economy by 2050. This pace and scale of growth will drive incredible possibilities for all of us,” Adani said.
The BCG report, titled “Banking for a Viksit Bharat,” stresses that transforming the financial sector over the next two decades will require structural shifts, including growing deposits, enhancing asset quality, and advancing digital capabilities.
Chairman of the Indian Banks’ Association, MV Rao, emphasised the importance of innovation in deposit strategies to drive inclusion and credit growth. Additionally, leveraging digitization and emerging technologies like GenAI will be crucial.
“To fuel inclusion and credit growth, we must continue to innovate and reimagine our deposit strategies, aligning them more closely with our customers’ evolving needs and preferences. This growth will be aided by our workforce’s full potential, which must be harnessed using digitisation and emerging technologies like GenAI,” Rao said.
Director General at FICCI, Jyoti Vij, pointed out that while India’s digital public infrastructure provides a strong foundation, future efforts must focus on strengthening climate and cybersecurity resilience, real-time networks, and specialized talent to ensure the success of the banking sector 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 an ambitious yet achievable goal. It demands a transformation in the financial services sector, with banks at the forefront.
“India’s banking system is in a strong position today, acting as a launchpad for the Viksit (developed) Bharat mission. It will have to build for the next two decades through structural shifts – growing deposits, enhancing asset quality, and improving productivity while advancing digital capabilities and future competencies,” he said.