India will shape global growth in next decade: Shaktikanta Das –

Mumbai: Former RBI Governor Shaktikanta Das said that in the next decade, the Indian economy will determine the shape of global growth.“The next decade will not be a decade in which India simply participates in global growth, but rather a decade in which India participates in shaping global growth,” he said, framing macroeconomic stability and inflation control as consistent with sustainable high growth.In his keynote address at the Banking and Economy Summit today, Das, who is currently Second Principal Secretary to the Prime Minister, laid out a forward-looking road map for India, arguing that the country is moving from recovery to global influence.Regarding fiscal policy, Das pointed to the continued process of fiscal consolidation along with increased public investment. India has moved on a fiscal glide path from the height of the pandemic, with central government debt targeted to decline towards 50 (±1) per cent of GDP by 2031.

At the same time, capital spending rose sharply. He suggested that this approach reflects a model where fiscal consolidation does not come at the expense of growth.He said that trade policy has witnessed a structural transformation. The recent agreements represent a “paradigm shift” in India’s engagement abroad, placing the country in the “central sphere of global trade.” By negotiating from what he described as a position of strength, India is expanding its footprint through free trade agreements even as global trade conditions remain uncertain.

Technology and digital public infrastructure constitute another pillar of the future strategy. Das spoke of “India Stack 2.0” as a “more precise, intelligent, AI-driven and globally scalable evolution,” signaling a move towards sovereign AI capability and AI-enabled public platforms that extend beyond payments to credit, trade and governance.Regarding energy, he said that ambition has moved to implementation. With 50% of installed electricity capacity already generated from non-fossil fuel sources, India aims to produce 5 million metric tons of green hydrogen annually by 2030.

He said the transition was now about competitiveness and resilience, not just climate commitments.The call to action was addressed to policymakers, financial institutions, industry leaders and investors. “‘Developed India’ – Vixit Bharat – is not just a destination on the calendar; it is a commitment we make today for the future generation,” he said. He sharpened the message with a balancing metaphor: “We must run both a marathon and a sprint, maintaining macroeconomic and financial sector stability while aggressively expanding the new frontiers of growth,” Das said.Even as he cited domestic strengths, Das pointed to external risks. He said the global economy is going through “continued geopolitical fragmentation, reorganization of supply chains and uneven economic momentum,” with “risks tilted strongly to the downside.” Rising public debt and widening fiscal deficits in major economies could lead to a tightening of global financial conditions and increased volatility of capital flows to emerging markets.He also pointed to India’s earlier vulnerabilities, noting that the country grappled with a “dual balance sheet” problem of stressed banks and over-leveraged companies. He said the transformation since then had transformed the financial system into a “resilient and dynamic engine of growth,” supported by stronger bank balance sheets, debt-relieved companies and households that still had net financial assets.According to Das, growth opportunities lie in deepening trade integration, AI-led productivity gains, and a manufacturing recovery that includes electronics, semiconductors, defense and green energy. The expansion of digital public infrastructure and retail participation in capital markets adds to local financial depth.