India will grow from current $3.4 trillion economy to a  $7.5 trillion one in the next five years, Deepak Parekh, Chairman of HDFC Ltd, said on Monday.

Noting that India is not decoupled from the world and the country too will face slowdown, he said. Parekh, however, highlighted that there is consensus across the board that the country will still remain amongst the fastest growing major economies in the world. 

“GDP growth for 2022 may be slightly lower than 7 per cent, but that is no reason for disappointment. What is important to note is the inherent resilience that is now embedded in the Indian economy. For India, it is the pace of growth that is exciting”, Parekh said in his address at the 21st World Congress of Accountants (WCOA) in Mumbai. 

This is the first time in 118 years that India is playing host to the WCOA, which this year has seen the largest participation till date of about 10,000 delegates, including over 3000 joining virtually.

Parekh, who heads India’s leading mortgage lender HDFC, reeled out data from a recent research report which estimated India’s per capita income in the next ten years to rise to $5,200 by 2031 from $2,300 now; India could by 2031 have the third-largest stock market with a market capitalisation of $10 trillion and India’s services share in GDP is likely to grow from 55 per cent to 64 per cent in 2031.

CLIMATE RISK 

Parekh highlighted that even globally, much of the carbon accounting methodologies are evolving. There is also a chasm of climate risk — wherein the environmental scientists don’t understand Finance well enough, and the finance professionals don’t completely understand the science. “ But it is a gap that needs to be bridged. I have heard many lament saying lack of climate and emissions data is the biggest hindrance. Yet, hiding behind lack of data is not an excuse”, he added.

“There is no reason why the Indian financial system for instance, cannot collaborate together on climate risk and measuring financed emissions”.

Stating that India is at an inflexion point on climate risk, Parekh said that some of the larger financial institutions can take the lead to work together to have a single platform wherein Indian FIs can use common data to determine climate risk and begin to measure their finished emissions.

This way the financial system can create a verifiable record of green loans. “Over time, green loans could entail lower risk weights, be considered as priority sector loans or have differential pricing. The point is we need to work together to find common sustainable solutions that work for the country”, he added.  

 

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