Goldman Sachs: India will leave America behind in the economy by 2075, know who will be the top-3 countries
Goldman Sachs has said in its latest report that India will become the second largest economy in the world by 2075 leaving behind not only Japan and Germany but also the US.
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Goldman Sachs has said in its latest report that India will become the second largest economy in the world by 2075 leaving behind not only Japan and Germany but also the US. Currently, India is the fifth largest economy in the world after Germany, Japan, China and the US. The investment bank wrote that innovation, technology, higher capital investment and rising labor productivity will help India's economy in the coming years.
Shantanu Sengupta, India economist at Goldman Sachs Research, said, "India's dependency ratio will be the lowest among regional economies over the next two decades." Dependency ratio is measured by the number of dependents against the total working age population.
Shantanu Sengupta said that the key to unlocking the potential of India's rapidly growing population is to boost its labor force participation. He said that for the next 20 years, the proportion of India's dependence on big economies will decrease.
"So this is really the right time for India to continue to set up manufacturing capacity, continue to grow services, continue to develop infrastructure," he said.
Goldman Sachs said in the report that it is an opportune time for the private sector to scale up on capacity building in manufacturing and services. The investment bank said that this would help in creating more jobs in the country and making proper use of a large labor force.
Goldman predicted that capital investment would be another important driver of India's growth. "India's savings rate is expected to rise with falling dependency ratio, rising incomes and financial sector development, creating a pool of capital to spur further investment," said the Goldman report.
The labor force participation rate in India has declined over the past 15 years, the report said. The labor force participation rate for women is "significantly lower" than that of men, it said, adding that "all working-age Only 20% of women in India are employed. The report states that this low figure may be due to women being primarily engaged in work that does not measure up to economic measures of formal employment. Goldman Sachs said that net exports have also been a hindrance to India's growth, as India runs a current account deficit.