India
will overtake Japan to become the world's third largest economy within 25
years, predicts William T Wilson, managing director and chief economist, Keystone
India, the Indian arm of the Chicago-based professional services firm LaSalle
Consulting in a research report. "The Indian economy will be the third
largest after the US and China in another 25 years, he says.s" The
report, The India Century, examines and projects India's economic growth
potential over the next half century using the latest data on demographic
changes and policy reforms. "India's economic reforms, which formerly
were driven by responses to crises, are now driven by policy. Several key
sectors, including pharmaceuticals, power, telecommunications, civil aviation,
insurance and real estate, are now open to foreign direct investment. Many
other positive steps have been taken, such as recognising product patents
on drugs, lessening of bureaucratic controls and the recent announcement by
the main opposition party that they will support ongoing reforms," he
said. Demographics
and economic reform are driving India's growth," he says. Keystone India
facilitates the flow of trade and investment between the US and India and
tracks political and economic development between the two countries.
"India has also made better use of invested capital than China. China's
investment as a share of GDP is twice that of India, but its GDP growth rate
has been only 50 percent higher. Rising domestic investment is likely to lift
India's trend GDP growth rate above seven percent for some time," concludes
Wilson. Wilson
said India's working age population is expected to grow continuously over
the next 40 years. At the same time, China is aging faster than any other
country in history, largely due to its one
child policy. "With half the population under the age of 25, India will
have the youngest labour force in the world, and its population is expected
to exceed China's by 2030."
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