The economic boom that has lifted India’s growth rates has also buoyed the spirits of executives based in the country. Research conducted by The McKinsey Quarterly over the past four years highlights just how much more optimistic they are than their global counterparts. Each quarter since 2004, McKinsey Global Surveys have explored the views of executives on their country’s economy and their expectations for the workforce.
Executives around the world have consistently been somewhat more optimistic than not about future economic conditions. Those in India have been far more optimistic—with as much as a 30-percentagepoint spread between those who expect economic improvement every quarter and those who don’t.
Such optimism is not unfounded. Since India began a major reform effort, in 1991, the country has moved away from the dismal growth rates that had plagued it since independence 60 years ago. GDP has grown at more than 8% over the past three years, hitting 9.4% in the most recent fiscal year. This robust economy has lifted hundreds of millions of people out of poverty. In addition, India is now home to world-class companies not only in IT services but also in the automotive, steel, and telecommunications industries.
Research by the McKinsey Global Institute indicates that the country’s middle class will continue to grow, accounting for more than 40% of the population by 2025,2 compared with about 5% today.