India could reach $20 trillion economy by 2036 with broad reforms: Equirus report

India could become a $20 trillion economy by 2036, but getting there would require a broad-based reform push rather than reliance on any single growth driver, according to an Equirus research report.

The report, as cited by ANI, has laid out a 20-point agenda covering infrastructure, capital markets, human capital, services, urban governance and the wider real economy. It said sustained implementation across these areas could put India on a much faster growth path over the next decade.

India's economy, currently estimated at around $3.7 trillion, would have to grow about 5.5 times to reach the $20 trillion mark. This translates into nominal growth of roughly 18% a year in dollar terms.

Equirus cited China's experience as evidence that such a pace, while difficult, is achievable. China managed around 18% annual growth in dollar terms for 11 consecutive years from a comparable base of about $1.7 trillion, the report said.

The reform agenda includes measures aimed at unlocking investment without putting additional pressure on government finances. Bringing fuel under the Goods and Services Tax, for instance, is among the proposals. The report also calls for states to fully utilise their budgeted capital expenditure.

Equirus estimates that simply closing the gap between states' planned and actual capital spending could add around Rs 5.2 trillion to GDP without requiring fresh borrowing.

Another proposal is to create an India sovereign fund on the lines of Singapore's Temasek. The government could pool its equity holdings in public-sector companies into the fund, potentially creating seed capital of about $249 billion. The resulting proceeds could then provide a recurring source of funding for infrastructure and other priorities.

The report also sees considerable scope to deepen India's capital markets. It has recommended bringing bonds and equities on an equal tax footing, gradually moving some small-savings money towards market-priced bonds, doing away with advance tax and reducing tax deducted at source on investment income to a flat 5%.

Such changes, according to Equirus, could free up significant working capital while helping build a deeper corporate bond market.

Services would need to become an even larger part of the economy for India to reach the target. The sector currently accounts for about 54% of GDP and would need to cross 65%, while its economic value would have to rise from around $2 trillion to more than $11 trillion.

Global capability centres could be an important part of this expansion. Equirus has proposed a national policy that could help increase their number from more than 1,800 today to 5,000. The report estimates that this could create an economic impact of $470-600 billion and generate 20-25 million jobs.

Tourism is another area where India could unlock additional foreign exchange earnings. Equirus estimates that matching Turkey's performance could bring in another $21 billion a year.

But higher growth will also depend on improving India's productivity and innovation capacity. Research and development spending is currently around 0.8% of GDP, while India trails China significantly in patent filings.

The report has called for the restoration of research and development incentives, greater private participation in education, outcome-based funding for universities and a substantial expansion of apprenticeship programmes.

Equirus estimates that the reform package could raise underlying rupee growth from around 10.5% to 14.2%. Even that, however, would not be sufficient on its own to deliver a $20 trillion economy in dollar terms. The rupee would also need to appreciate by around 3-3.6% annually.

The proposed reforms could also have a positive fiscal impact. Equirus estimates their direct annual cost at around Rs 3.4 trillion, compared with direct gains of about Rs 7.9 trillion, resulting in a net first-year gain of roughly Rs 4.5 trillion.

"The way the economy grows matters just as much as how fast," the report said, arguing that structural changes will be as important as the pace of expansion.

"The path to a $20 trillion economy doesn't rest on any single lever - it rests on twenty of them reinforcing one another," it added.

Equirus said China's experience shows that India can aspire to growth on this scale, but reaching $20 trillion by 2036 will ultimately depend on sustained execution across infrastructure, capital formation, education, innovation, services, tourism and governance.