India to overtake United States by 2050: Report

[Contrarian]

India to overtake United States by 2050: Report

MUMBAI: 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, Goldman Sachs has said, scaling up estimates of the country's prospects in its October 2003 research paper widely known as the BRICs report.

The original report had 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.

Goldman Sachs' research arm said in a global research paper released on Monday that India's growth acceleration since 2003 represented a structural increase rather than simply a cyclical upturn. It said productivity growth drove nearly half of overall growth and expected it to continue for some years.

"We project India's potential or sustainable growth rate at about 8% until 2020. The implication is that India's contribution to world growth will be even greater (and faster) than implied in our previous BRICs research," Goldman Sachs Global Research said.

The vote of increased confidence from the world's largest investment bank, whose previous chairman Henry Paulson is now treasury secretary in the Bush administration, 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.

The paper said 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, and greater financial deepening. These factors still have some distance to run," it said.
http://timesofindia.indiatimes.com/India_to_overtake_US_by_2050_Report/articleshow/1411052.cms

 

[Contrarian]

India to overtake United States by 2050: Report

MUMBAI: 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, Goldman Sachs has said, scaling up estimates of the country's prospects in its October 2003 research paper widely known as the BRICs report.

The original report had 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.

Goldman Sachs' research arm said in a global research paper released on Monday that India's growth acceleration since 2003 represented a structural increase rather than simply a cyclical upturn. It said productivity growth drove nearly half of overall growth and expected it to continue for some years.

"We project India's potential or sustainable growth rate at about 8% until 2020. The implication is that India's contribution to world growth will be even greater (and faster) than implied in our previous BRICs research," Goldman Sachs Global Research said.

The vote of increased confidence from the world's largest investment bank, whose previous chairman Henry Paulson is now treasury secretary in the Bush administration, 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.

The paper said 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, and greater financial deepening. These factors still have some distance to run," it said.

http://timesofindia.indiatimes.com/articleshow/1411052.cms

 

[Contrarian]

'India's per capita GDP in dollars will quadruple'

MUMBAI: Goldman, which separated from its Indian partner Kotak Mahindra Capital to strike out on its own in a country it bets could become the second largest economy in the world, ahead of the US, by 2050, (courtesy its latest report), has, however, cautioned that political risk (including a rise in protectionism), supply-side constraints (including business climate, education and labour market reforms) and environmental degradation could run the ship aground.

Tushar Poddar and Eva Yi, authors of the paper say that the higher growth rate under the new projections will have large implications for demand in the country. From 2007 to 2020, India's per capita GDP in dollars will quadruple (a third higher than the original BRICs projections). Indians will also consume about 5 times more cars and 3 times more crude oil as compared to 3.5 times more motor cars and 2.3 times more oil estimated by Dominic Wilson and Roopa Purushothaman in October 2003, the report says.

Purushothaman, who subsequently left Goldman to join the Future Group in India, agrees that the new estimates are entirely possible. Having seen the country's progress from within, she is more inclined to revise the earlier projections. "In some areas of corporate and structural reform, the country has used the current upswing to move at a faster rate than when the first study was done in 2003," Purushothaman told TOI.

The authors of the new paper, who measured productivity by focussing on output and stripping off cyclical variations in inputs, found that since 2003, there has been a structural increase in India's potential growth to nearly 8% from 5%-6% in the previous two decades.

"Productivity growth has been the key driver behind the jump in GDP growth, contributing to nearly half of overall growth since 2003, compared with a contribution of roughly one-quarter in the 1980s and 1990s," they say.

Goldman's restated optimism perched on a host of ifs and buts comes five weeks before finance minister P Chidambaram presents the annual budget. He is expected to simplify taxation, allow more room for foreigners in India and provide a boost to local businessmen expanding abroad. He is expected to announce more spending on health and education.

The Goldman paper says "to embark upon its growth story, India will have to educate its children and its young people (especially its women) and it must do so in a hurry. Lack of education can be a critical constraint to the growth of the knowledge-based IT sector, as well as in the move to mass employment in manufacturing. The demographic dividend may not materialise if India fails to educate its people."

Trade would be one of the key factors in the India growth story as foreign firms hope to sell more products to the growing Indian middle-class and hope to participate in economic activity such as infrastructure building.

"Average tariffs have fallen to below 15% from as high as 200% as India began to reintegrate with the global economy. The impact of opening up has been significant. Exports have risen 14 times as India has rapidly gained trade share.

This development has been most evident in the past 3 years, when trade has grown, on an average, 25% a year," the paper says.

The largest US trade delegation to ever visit India spent two weeks last month trying to sew up deals with local businessmen. UK's chancellor of the exchequer and perhaps PM-in-waiting Gordon Brown and his team of nearly 150 businessmen and women just left India after hobnobbing with Indian counterparts for a week. Brown has said he hopes to quadruple exports to India by 2020, and is targeting education as a key area for ties.

It is a seemingly unrelated event, but something changed dramatically after India proposed the nuclear agreement with the US. Immediately after it was cleared by US Senate, the country's economic prospects have begun to look up significantly.

Ron Somers, president of the US-India Business Council, told TOI recently, "The Indo-US nuclear deal is the biggest foreign policy achievement of this century. It will change many things." He was right. The country's future already looks different.
http://timesofindia.indiatimes.com/...ta_GDP_will_quadruple/articleshow/1411487.cms

 

[A.Rahman]

Meanwhile US will be flying ships with warp engines.

 

[Adux]

too long to predict, Various factors might come into play.
But still good to hear

Rahman you are right, I dont think 40 yrs enough for India.

 

[Contrarian]

Its not as though we are making the damn predictions. Its a respected organisation thats saying it.

 

[Adux]

Malay

Goldman Sachs deserve all the credit, but it is assuming lot of variable factors remain constant, yes it is sure-fire thing that India will overtake US, but in 2050. 3% growth in a trillion dollar economy means more than 8% 300 billion, What if US grows double what it is now, its quite possible with respect to their R&D base. What if US goes to War with China over Taiwan, wipes of the Trade deficit. Down goes China. There are lot of factors at stake.

But it is great to hear it, I am sure India will be on top someday, 40 years is a bit too soon.

 

[Contrarian]

Could you believe that within 10 years so much has happened in India? Could you believe that the day would come that the United States would actively pursue a relationship with India? In this day and age, countries simply skip generations in their growth, that old developed economies went through, thus making them catch up faster.

India's growth has been filled with the sanctions imposed on her, yet our country has grown economically as well as militarily, has it not? Then NOW, when the sanctions are being removed, and every country is trying hard to have a good relationship with India, dont you think that things would be even faster and better?

 

[niaz]

No doubt India and actually all the BRIC ( Brazil, Russia, India and China) are emerging super economies. India is a long way off catching Japan. One has to asume that US will stand still for India to catch it.

What happens if the oil shoots up to $100 per bbl. How will it effect the emerging economie??. India doubled in GDP because the base was low. Once you reach a trillion dollar economy you reach a saturation/maturity level from where even a 2% growth is considered good.

Let us keep every thing in perspective. I will be happy if India overtakes US because then Pakistan will be able to export all it can into the Indian consumer market and a truly super India couldnt care less about Siachin or Sir Creek, even Kashmir would become a side issue.

However it is still a very long way off ( Abhi Dilli door hai).

 

[Adux]

Economics though it follows historical patterns, cant be replicated in its exact form in the future, every stage of growth will have different.
Life till 20, life from 20 to is different, different priorites and difficulties, responsibilities
God damn I feel old..!!!!!

 

[Awesome]

yeh kya bakwaas hai

 

[Contrarian]

Surely, then lets talk relatively, the only countries that have teh capacity to challenge the US are these BRIC nations, with teh most promising being China, then secondarily Russia, simply on account of the huge natural resources it has and its size.

India wil SURELY beat Japan in economic scale. What remains to be seen is whether we are the second or third biggest economy. But either way, the future looks good.


P.S: Adux, if you are unable to perform because you feel old, then there are pills for that

 

[Adux]

P.S: Adux, if you are unable to perform because you feel old, then there are pills for that

Touche!!!! ouch

 

[Neo]

2050 ey?

Kaun jeeta hai teri zulf ke sar hone tak.
Aah ko chahiye ek umr asar hone tak...

 

[khanbhai]

this is the predicted 2050 GDP
http://www2.goldmansachs.com/hkchina/insight/research/pdf/BRICs_3_12-1-05.pdf
india is no where close to US
everything is possible though