India to outpace US as world’s 2nd most powerful economy
By 2030, seven of the world’s top 10 economies will be current emerging markets, according to the latest report by London-based multinational banking and financial service company Standard Chartered.
The long-term projection shows that India is likely to become larger than the US, while neighboring China will reportedly steal the crown of world’s most powerful economy (currently held by the US) as soon as 2020. At the same time, Indonesia may break into the top five economies.
“India will likely be the main mover, with its trend growth accelerating to 7.8 percent 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, as quoted by Quartz.
The GST, one of the largest tax reforms to be implemented by Delhi, was rolled out in 2017. The measure is aimed at simplifying the country’s cumbersome tax regime. The IBC, launched in 2016, consolidates the bankruptcy and insolvency laws in India.
The UK firm noted that the aging population is set to have a significant impact on global growth, but India, which is currently ranked as the world’s sixth biggest economy, will remain unfazed, as the country has the world’s largest group of young people. Nearly half of the Indian population is under the age of 25.
“The rising aspirations of a young population will continue to support consumerism in India’s economy,” according to the report.
Standard Chartered also said that the country would need to create 100 million new jobs in the manufacturing and service sectors by 2030 to cope with demand for massive employment.
“India needs to train circa 10 million people annually, but currently has the capacity to train just 4.5 million,” the report reads.