According to a report by Morgan Stanley Research, India has made substantial progress in the global landscape over the past decade, leading to significant positive outcomes for the macroeconomic and market outlook.The report titled “How India Has Transformed in Less than a Decade” focuses on ten major changes that have taken place in India, primarily as a result of the countrys policy decisions, and examines their implications for the economy and market.It highlights that India has undergone notable transformations since 2013, leading to a substantial improvement in its global standing. Over the course of a decade, India has made significant advancements in the world order, resulting in positive implications for both the macroeconomic and market outlook. The report aims to provide a brief overview of these changes and their consequential impact.Image Source: YahooIt further stated, “We often encounter considerable scepticism regarding India, particularly among foreign investors, who argue that India has not fully realized its potential (despite being the second-fastest-growing economy and having one of the top-performing stock markets over the past 25 years), and that equity valuations are excessively high.” It went on to add, “However, this perspective fails to acknowledge the significant transformations that have occurred in India, particularly since 2014.”According to the report filed by Morgan Stanleys Research, they have identified ten significant changes that have occurred in India. These changes include supply-side policy reforms, the formalization of the economy, the implementation of the Real Estate (Regulation and Development) Act, the digitization of social transfers, the introduction of the Insolvency and Bankruptcy Code, the adoption of flexible inflation targeting, a heightened focus on foreign direct investment (FDI), Indias equivalent of the 401(k) retirement savings plan, government support for corporate profits, and a positive sentiment among multinational corporations (MNCs) at a multiyear high.Image Source: TwitterDuring the data collection process for supply-side policy reforms, the research has collected figures regarding Indias corporate tax rates and infrastructure. Over the span of 10 years, Indias base corporate tax rate has consistently remained below 25 percent, and for new companies starting operations before March 24, the tax rate has remained at 15 percent.Regarding infrastructure development, the research has considered various factors such as the expansion of national highways, the growth of the broadband subscriber base, the increase in renewable energy sources, and the electrification of railway routes.In terms of the formalization of the economy, the research from Morgan Stanley has examined indicators such as GST collections, which have displayed a consistent upward trend over the years, and the growth of digital transactions, which have reached 76 percent of the GDP.According to Morgan Stanley, India is projected to achieve a growth rate of 6.2 percent in the ongoing financial year of 2023-24. This positive outlook is supported by improving macroeconomic stability, indicating that there may not be a need for restrictive monetary policy measures.
