NEW DELHI: India is expected to overtake the US and become the world’s second-largest economy by 2075, according to a report by Goldman Sachs Research.
As of now, India is the world’s fifth-largest economy after Germany, Japan, China, and the United States It said as India’s population of 1.4 billion becomes the world’s largest, its GDP is likely to expand dramatically.
“Over the next two decades, the dependency ratio of India will be one of the lowest among regional economies,” the report said.
Santanu Sengupta, Goldman Sachs Research’s India economist, has also forecasted that India will have one of the lowest dependency ratios among large economies over the next 20 years. “So that really is the window for India to get it right in terms of setting up manufacturing capacity, continuing to grow services, continuing the growth of infrastructure,” he said.
The report said that innovation and increasing worker productivity are going to be important for the world’s fifth-biggest economy. Capital investment will also going to be a significant driver of growth in the future.
With falling dependency ratios, rising incomes, and deeper financial sector development, India’s savings rate is expected to rise due to favourable demographics.
The report said the government placed a priority on infrastructure creation, especially in the setting up of roads and railways. The report also mentions that the main downside risk for India’s economic growth would be if the labour force participation rate does not increase.