India Will Surface as the Second Largest Economy After U.S by 2075 As per Recent Market Research Report

According to a market projection from investment bank Goldman Sachs, by the year 2075, India will have overtaken Germany, Japan, and the United States as the second-largest economy in the world. India is the fifth-largest economy in the world right now. The Goldman Sachs analysis states that technology, innovation, and favorable demographics, increased capital investment, and improved worker productivity are the main drivers of this forecast.  The market analysis reveals India would have one of the lowest dependency ratios among regional economies over the next 20 years.

Future growth will also be significantly fuelled by capital investment, innovation, and rising worker productivity, said Santanu Sengupta, economist for India at Goldman Sachs Research. The nation benefits from favorable demographics, but GDP will not be solely influenced by these factors. Technology and innovation would be crucial for India's economic development. The non-governmental trade group of India, Nasscom, stated that by the end of 2023, the country's technology industry income is anticipated to rise by $245 billion.

Streamed Software Products and Advanced Work Force

As per the Nasscom research, this increase will come from all areas of IT, software product streams, and business process management. The investment bank stated in a separate research in June that just 20% of all working-age women in India are employed, and that this low number may be attributed to the fact that women are typically employed in piecework, which is not taken into account by economic measurements of formal employment. The fifth-largest economy in the world is going to need innovation and higher worker productivity.

Technically speaking, that means the Indian economy's working-class sector and capital are producing more per unit of input. With declining dependency ratios, higher earnings, and deeper financial sector growth, India's savings rate is anticipated to rise. This will open up more resources to support additional investment. The market research indicated that the government gave building infrastructure a high priority, particularly when it came to building roads and railroads.

Infrastructure Growth and Government Focus on the Economy

Goldman Sachs reported now is the right time for the private sector to increase capacity creation in manufacturing and services in order to produce more employment and saturate the vast labor force. The market report states that the major danger to India's economic growth is a decline in the labor force participation rate. The report observed that India's labor force participation rate has decreased over the past 15 years and emphasized that women's labor force involvement is much lower than that of men.

For the next 20 years, Sengupta predicts that India will have one of the lowest dependency ratios among developed nations. He believes there is a true opportunity for India to establish industrial capacity, continue to expand its service industry, and build out its infrastructure. Goldman Sachs analysis depicted that the Indian government has prioritized building infrastructure, particularly when it comes to building roads and railroads.

Increased Investments and Emphasized Exports Drives Demand

In order to encourage investments in infrastructure, the nation's most recent budget plans to maintain the 50-year interest-free lending programs to state governments. The market research report said that because India has a current account deficit, net exports have also slowed down the nation's economic expansion. However, the bank emphasized that exports of services have padded current account balances. Unlike many other more export-dependent nations in the region, India's economy is driven by domestic demand, with up to 60% of its growth primarily.

The above is attributable to domestic consumption and investments, as quoted in a Goldman Sachs analysis. India is expected to overtake China as the third-largest economy by 2030, says predictions by S&P Global and Morgan Stanley, among other international rating agencies. India's first-quarter GDP increased 6.1% year over year, far exceeding the 5% growth forecast. The country's full-year growth is predicted to be 7.2%, down from the fiscal year 2021–2022's 9.1% growth.