Goldman Sachs in its latest report said that India’s economy is expected to become the world’s second largest after China by 2075 as it is on track to overtake the United States.
According to the Wall Street bank, India’s GDP will grow to $52.5 trillion by 2075, compared to $57 trillion and $51.5 trillion for China and the US, respectively.
The bank said in the report that the South Asian country’s economic growth will be mainly driven by a large labor force, advances in technology and rising capital investment.
According to the International Monetary Fund, India is currently the fifth largest economy in the world with a GDP of $3.74 billion and a per capita income of $2,600.
“India has made more progress in innovation and technology than some might have imagined,” said Santanu Sengupta, chief India economist at Goldman Sachs.
“Innovation and increasing worker productivity are going to be critical for the world’s fifth largest economy. In technical terms, it means more output for each unit of labor and capital in the economy of India.
Heavy import taxes, bureaucracy and red tape, and dominance of domestic industrialists are some of the hurdles India faces in its journey towards becoming a major economic power of the world.
Goldman’s Sengupta said, “Driven by favorable demographics, falling dependency ratios, rising incomes and the development of a deeper financial sector, India’s savings rate is likely to rise, providing a pool of capital to drive further investment.” is likely to.”
In April this year, India overtook China as the world’s most populous country, according to UN population estimates, the most significant change in global demographics since records began.
“India’s large population is clearly an opportunity, however, the challenge is to use the labor force productively by raising the labor force participation rate. This, Sengupta said, would mean creating opportunities to absorb this labor force as well as training and upskilling the labor force.