BRIC (B razil, Russia, India, China) report on economies by a leading survey company on economy of these 4 countries Goldman Sachs has asserted in a report that by 2050 India may overtake US.
Productivity growth will help India sustain over 8% growth until 2020 and become the second largest economy in the world, ahead of the US by 2050, scaling up estimates of the country’s prospects in its October 2003 research paper widely known as the BRIC report.
It is projected that India’s GDP would outstrip Japan’s by 2032 and that in 30 years it would be the world’s third largest economy after China and the US. The new report goes one step further by moving India up from No. 3 and No. 2 in the global sweepstakes of tomorrow.
A global research paper released said that India’s growth acceleration since 2003 represented a structural increase rather than simply a cyclical upturn. Productivity growth drove nearly half of overall growth and expected it to continue for some years.
India’s potential or sustainable growth rate is about 8% until 2020. The implication is that India’s contribution to world growth will be even greater and faster than implied in previous BRIC Global research reports.
The vote of increased confidence from the world’s largest investment bank comes when India is easing into its new seat in the global political arena as a nuclear power and consolidating its economic might as the world’s services backbone.
A turnaround in manufacturing productivity was central to the ratcheting up of productivity growth. The private sector was the principal driver of this turnaround, as it improved efficiency in the face of increased competition due to the cumulative effects of a decade of reforms.
The underlying reasons are:
* Increased openness to trade;
* Investment in information and communication technology;
* Greater financial deepening;
These factors still have some distance to run.
The above are more or less hypothetical projections. The growth rate can be sustained and reach the projected only if all the above factors are consistently complied with during the entire time period up to 2050. There can be other factors which cannot be anticipated now which later on can have a retardation affect on projected growth.