According to Goldman Sachs, India is set to become the world’s second-largest economy by 2075, overtaking not just Japan and Germany but also the United States.
At present, India holds the position of the world’s fifth-largest economy, trailing behind Germany, Japan, China, and the United States.
According to a recent report by the investment bank, India’s projected advancement to become the world’s second-largest economy is propelled by several factors. These include a growing population, advancements in innovation and technology, increased capital investment, and rising worker productivity.
Goldman Sachs Research’s India economist, Santanu Sengupta, stated that in the next two decades, India is expected to have one of the lowest dependency ratios among regional economies.
The dependency ratio of a country is determined by the proportion of dependents to the working-age population. A low dependency ratio signifies a higher proportion of working-age adults who can provide support for both the younger and older population segments.
Sengupta emphasized that unlocking the potential of India’s fast-growing population hinges on increasing the participation of its labor force.
Furthermore, Sengupta forecasts that India will sustain a comparatively low dependency ratio among leading economies for the next twenty years.
Sengupta stated that this period presents a crucial opportunity for India to establish manufacturing capacity, foster the growth of services, and continue developing its infrastructure.
The Indian government has prioritized infrastructure development, with a particular focus on building roads and railways. In line with this objective, the recent budget aims to sustain interest-free loan programs for state governments for up to 50 years, aiming to stimulate investments in infrastructure.
Goldman Sachs suggests that the present moment is opportune for the private sector to expand manufacturing and services capabilities, with the aim of creating more jobs and accommodating the substantial labor force in India.
India’s advancement in technology and innovation plays a pivotal role in driving its economic trajectory, as highlighted by the investment bank. According to Nasscom, India’s non-governmental trade association, the country’s technology industry revenue is projected to rise by $245 billion by the end of 2023.
This growth will be driven by various sectors, including IT, business process management, and software products, as indicated in Nasscom’s report.
Source : cnbc.com
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