India has been predicted to become the world’s second largest economy by the Goldman Sachs Research report surpassing the US by 2075.
It currently has the fifth-largest economy in the world, following that of Germany, Japan, China and the United States.
The country’s rapidly expanding population is expected to have a significant impact on innovation and technology, increasing capital investments, and rising worker productivity.
“Over the next two decades, the dependency ratio of India will be one of the lowest among regional economies,” CNN quoted Santanu Sengupta, Goldman Sachs Research’s India economist.
Mr. Sengupta further said that boosting participation within India’s labor force is the key to maximize the potential of the country’s rapidly growing population.
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In addition, he predicted that among the large economies, India will have one of the lowest dependency ratios for 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,” Mr. Sengupta said.
According to the Goldman Sachs analysis, the Indian government has prioritized building infrastructure, particularly when it comes to building roads and railroads.
In order to encourage investments in infrastructure, the nation’s most recent budget plans to maintain the 50-year interest-free lending programs to state governments.
The Goldman Sachs emphasizes that now is the right time for the private sector to increase capacity creation in manufacturing and services in order to produce more employment and saturate the vast labor force.
The investment bank stated that technology and innovation are going to be crucial for India’s economic development. The revenue of India’s technology sector is forecast to rise by $245 billion (Ksh34.58 trillion) by the end of 2023, according to Nasscom, a non-governmental trade organization. the Nasscom research reported that the increase would be driven by the software, business process management, and IT industries
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The report highlighted women’s participation rate in the labor terming it as ‘’ significantly lower’’ than that of men. This, it mentioned, as the major down risk for India’s economic growth unless the labor force participation increases.
