India will be the world’s second largest economy by 2075, Goldman Sachs Research said, citing the article How India Could Become the World’s Second Largest Economy.
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“As India becomes the world’s largest population at 1.4 billion people, its GDP is expected to grow dramatically. “Goldman Sachs Research forecasts that India will be the second largest economy in the world by 2075,” it says, noting that the article is provided for educational purposes only.
It is globally recognized that India is one of the fastest growing major economies, overtaking the UK for the fifth largest economy. Earlier this year, on February 25, Piyush Goyal, Union Minister for Trade and Industry, Textiles and Consumer Affairs, Food and Public Distribution, said in his address at the Asia Economic Dialogue in Pune that India will be the third largest economy in about four years. at best five years. That would mean that India would jump up two notches, placing behind the US and China.
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“My own belief in the way India is growing is that by 2047 we will likely bring our economy closer to $35-40 trillion. The desire of every Indian is to be second to none,” Goyal said. Indeed, the Indian economy has put on a remarkable performance. It has grown rapidly over the past nine years from about $2 trillion to $3.5 trillion currently and is expected to surpass $3.75 trillion in 2023.
The above-mentioned article states that demographics are not the only basis for Goldman Sachs Research’s long-term forecasts for the Indian economy. “India has made more strides in innovation and technology than some might think. Yes, the country has demographics on its side, but that won’t be the only driver of GDP. Innovation and increasing labor productivity will be important for the world’s fifth largest economy. Technically, that means higher output for every unit of labor and capital in the Indian economy,” it said.
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“Capital investments will also be a key growth driver in the future. Due to favorable demographics, India’s savings rate is expected to rise with falling dependency ratios, rising incomes and stronger financial sector development, likely freeing the capital pool for further investment.
Besides the focus on public spending in the last three budgets, the government’s reform policies have helped attract private investment, which will be a key driver in the years to come. The article rightly states: “Given the healthy balance sheets of private companies and banks in India, we believe the conditions are conducive to a private sector investment cycle.”
Prime Minister Narendra Modi’s repeated belief in the demographic dividend was widely acknowledged in the article. Favorable demographics will contribute to potential growth over the forecast period, the article said. “India’s large population is clearly an opportunity, but the challenge is to use the workforce productively by increasing labor force participation rates. “That means creating opportunities to absorb these workers while also educating and upskilling the workforce,” it said. The Modi government’s policy focus on Startup India, Standup India and Skilling India are efforts in this direction.
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India’s rapid growth over the past nine years has been a conscious effort by the Modi government. As early as March 30, 2014, the Prime Minister had tweeted via his Twitter account: “We have a demographic dividend, democracy and a lot of demand. These 3Ds – no other nation has…”. He turned his vision into the country’s growth strategy.
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