Indian economy is expected to grow at an average rate of 9.3% per annum over the next two decades, said a report of Standard Chartered Bank titled ‘India in Super-Cycle’, released on Wednesday. The report said that India could become the world’s third-largest economy by 2030, after China and United States.
“The Super-Cycle Report projects that China is likely to overtake the US to become the world’s biggest economy over the next decade, while India could become the world’s third-largest economy by 2030,” said Gerard Lyons, chief economist and group head of global research, Standard Chartered Bank.
According to the report India is likely to grow faster, on average, than China over the next two decades. “We factor in a trend rate of growth of 6.9% for China, allowing for setbacks along the way, and of 9.3% for India, again taking into account the business cycle,” said Lyons.
The report adds that India has tremendous potential to catch up with China and the developed world. “Based on our forecasts, India’s nominal GDP (gross domestic product) could top $30 trillion by 2030, against its current level of around $1.7 trillion. By 2030, India could be 8.4 times bigger than it is today” he said.The report defines a super-cycle as a period of historically high global growth, lasting a generation or more, driven by increasing trade, high rates of investment, urbanisation and technological innovation, characterised by the emergence of large, new economies, first seen in high catch-up growth rates across the emerging world.
The report also said that India would have some challenges to face. “India needs to overcome its regulatory burden and address its infrastructure needs to achieve the desired growth,” he said.
There is a need for continued improvement in education, health care and skills as India provides the sizeable educated labour force needed for its private sector to grow, the report added.