- India’s economy will overtake the US by 2030. And will be the world’s youngest major economy.
- In just 12 years, India will undergo a startling transformation…
- By 2030, around 77% of Indians will be under the age of 44… and most of those will be under 25. The country will also have more than 1 billion internet users…
- Every second, three or more Indians go online for the first time. And by 2030 India will be a middle-class Nation. Consumer spending will quadruple. Rising to nearly $5.7 trillion in 2030.
- But the economy still faces major challenges. By 2022, more than half of Indian workers will need reskilling. And it still has some of the most polluted cities in the world.
- India will need to ensure its fast-growing economy is inclusive.
Asian giants securely heading to overtake America
A new world economic order is in the making, with today’s emerging markets, including India, at the heart of it.
India is likely to become the world’s second-largest economy by 2030, next only to China and overtaking the US, according to Standard Charted Bank’s long-term forecast released on January 2008. The UK-based multinational bank also predicts that based on nominal GDP using purchasing power parity exchange rates, China will overtake the US by 2020.
Top 10 countries by nominal GDP in 2020.
Current emerging markets will likely make up the majority of the biggest economies by 2030.
Standard Chartered Bank had raised growth forecast for China and India from its projections in 2013. “India will likely be the main mover, with its trend growth accelerating to 7.8% by the 2020s partly due to ongoing reforms, including the introduction of a National Goods and Services Tax (GST) and the Indian bankruptcy code (IBC),” says the report.
Launched in 2017, the GST attempts to simplify India’s cumbersome tax regime, while the IBC, rolled out in 2016 would strengthen the country’s bankruptcy and insolvency laws.
“Our long-term growth forecasts are underpinned by one key principle: countries’ share of world GDP should eventually coverage with their share of the world’s population, driven by the convergence of per-capita GDP between advanced and emerging economies,” the report said.
Jobs, jobs, jobs
Aging populations are likely to weight on global growth, but India, home to the world’s largest group of young people, will remain unfazed, Standard Chartered Bank notes. Half of the country’s population is under the age of 25.
The bank expects “the rising aspirations of a young population to continue to support consumerism in India’s economy.”
But a young demographic also creates a demand for massive employment. About 100 million new jobs must be created in the manufacturing and services sector by 2030, according to the report. To achieve this, it says, the government needs to close a widening skills gap, raise the participation of women in the workforce, and ease labor laws.
“India needs to train circa 10 million people annually, but currently has the capacity to train just 4.5 million,” the report says.
It also calls for reform to boost spending on infrastructure and reduce growing economic inequality in the country.
Are you optimistic for India’s future?
By : Cameron Blake
Source: Standard Chartered; Based on predicted nominal GDP