Can India overtake the US Economy by 2030 ?!

China and India were the 2 biggest economies before USA existed . India ran trade surpluses with most countries until the British colony came and robbed them of $45 trillion in 200 years of British rule . Welcome to The Atlantis Report . According to the latest report by London-based multinational banking and financial service company Standard Chartered.By 2030, seven of the world’s top 10 economies will be current emerging markets . 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. India is more than 5000 years old civilization, Just a 1000 years ago India's trade contribution to the world was 30%. But then Moghuls came followed by the British that saw India's wealth and knowledge plundered. When The British left India, India was facing abject poverty. Remarkable how India has come back to become top 3 economies of the world in just 60 years. Ageing populations are likely to weigh on global growth, but India, home to the world’s largest group of young people, will remain unfazed, Standard Charted notes. Half of the country’s population is under the age of 25. The bank expects “the rising aspirations of a young population to continue to support consumerism in India’s economy.” But a young demographic also creates a demand for massive employment. About 100 million new jobs must be created in the manufacturing and service sectors by 2030, according to the report. To achieve this, it says, the government needs to close a widening skills gap, raise the participation of women in the workforce, and ease labour laws. “India needs to train circa 10 million people annually, but currently has the capacity to train just 4.5 million,” the report says. It also calls for reforms to boost spending on infrastructure and reduce growing economic inequality in the country. India like China have more people with Master Degrees then any other country including the US. Plus ,they are an "emerging" market which means there is plenty of room to innovate and improve.While the west has gone as far as it can go . India has chance to become a big economy like USA in this century provide that the State and Central governments come up with right policies and develop the institutions that make it possible to sustain the economic growth in the long run. India has a nominal GDP of $2tn and USA has $17tn. India is growing at 8% p.a. and USA at below 2%. I assume that India will maintain growth differential of 3% (instead of 6% at present). I am going for the most pessimistic scenario. In order to arrive at the number of years it would take India to catch up with, we need to solve the below equation. $2tn (1+0.03)^n = $17.4 tn Solving the above, we would get n = 73 years. So it would take India approximately 73 years to become as big as USA. There are certain preconditions India needs to fulfil to sustain the current growth momentum. Universal Primary Education, Skilling, Universal Healthcare, Reforms in Higher Education, Improving the physical infrastructure, Encouraging Innovation, Minimizing Political bickering, Reforming bureaucracy by bringing in technocrats and experts in policy making, Empowering women and bringing them in to workforce, Minimizing the stranglehold of government on enterprises etc.., are some of them. If we do all these, the aggregate GDP of India at some point in this century may cross that of USA. But it is difficult (or improbable) to attain the per capita income level of developed countries for India. There are reasons for that. The large population is going to put pressure on the natural resources that we hold. As environmental concerns increase, it would be difficult to transfer the natural resources from one country to another as has been happening since the industrialization. A country needs to depend on its own stock of natural reserves to sustain the growth. This is where India may face problems in its quest to achieve a higher standard of living for its citizens. Land, Water, Minerals, Energy sources are going to become scarce in the future which ultimately limit its capacity to attain the higher per capita income as that of developed countries.








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