As per Goldman Sachs, it is the right time for the private sector to scale up and create capacity in manufacturing and services for generating more jobs to absorb the expanding labor force in India
New York City, NY
Investment bank Goldman Sachs predicts that India will overtake the US as the world’s second-largest economy by 2075, overtaking Japan, Germany, and the US. Currently, India stands at 5th rank amongst the world’s largest economies.
The growth in the Indian economy will be driven by the factors such as favorable demographics, innovation, technology, higher capital investment, and rising productivity of workers. “Over the next 2 decades, the dependency ratio of India will be one of the lowest among regional economies,” the report highlighted.
Goldman Sachs Research’s India economist, Santanu Sengupta highlighted and said “Yes, the country has demographics on its side, but that’s not going to be the only driver of GDP. Innovation and increasing worker productivity are going to be important for the world’s 5th biggest economy. In technical terms, which means greater output for each unit of labor and capital in India’s economy.”
“India’s savings rate is likely to increase with falling dependency ratios, rising incomes, and deeper financial sector development, which is likely to make the pool of capital available to drive further investment,” he further elaborated.
As per Goldman Sachs, it is the right time for the private sector to scale up and create capacity in manufacturing and services for generating more jobs to absorb the expanding labor force with the government working on developing roads, railways, and infrastructure creation.
As per the report, the main downside risk for India’s economic growth shall be if the labor force participation rate does not increase.