According to the most renowned economists around the world, India’s economy is the fastest growing one in the world. And, if it continues to grow similarly in future, by 2040, India’s economy will surpass that of the United States.
According to the reports furnished in “The World in 2050” by the premier consultancy firm PwC, it has been shown that by the year 2040, India’s GDP will exceed that of the US in purchasing power parity terms (purchasing power parity is responsible for the varied prices levels across nations).
If this really happens, India will be the second-largest economy in the world – the first being China.
However, India’s rapid population growth also accounts for this proposed rise in GDP. But experts dismiss it as only a part of the entire story. Major improvement with regard to per-person productivity owing to increased capital investments and better technological advancements play a bigger role in this mammoth leap. According to the predictions made by PwC, India’s economy will grow by 4.9% per annum from 2016 to 2050, and only 0.7% of that growth will be pumped by growing population.
Currently, India’s economy stands at the third largest in the world and it is further expanding at about 7.1% annually for current fiscal year 2016-17.
Furthermore, among the 32 largest economies in the world in 2016, only Vietnam is expected to grow faster than India in per capita over the next 30 years. With this growth, India’s economy is expected go from accounting for 7% of world GDP to 15%.
On the contrary, though PwC expects India to make significant strides in converging the gap with rich nations like the United States and Japan, Indians won’t fully catch up with their American counterparts. This is meted out by the estimation that in 2015, the Indian GDP per capita would still be less than one third of that of an average American. So, it is yet a long journey for the Indians to live according to the American standard of living.