India to become world's second largest economy by 2075: Report

New Delhi, July 11 (KNN) India is all set to surpass the US to become the second largest economy by 2075, according to the latest report released by Goldman Sachs on Monday.

Currently, India is the world’s fifth-largest economy, behind Germany, Japan, China and the US.

According to the investment bank report the innovation and technology, higher capital investment and rising worker productivity will increase drastically due to the burgeoning population of the country.

"Over the next two decades, the dependency ratio of India will be one of the lowest among regional economies," CNN quoted Santanu Sengupta, Goldman Sachs Research's India economist, as saying.

 Sengupta added that the key to drawing out the potential of India's rapidly growing population is boosting participation within its labour force.

He also forecasts that India will have one of the lowest dependency ratios among large economies for the next 20 years. “So that really is the window for India to get it right in terms of setting up manufacturing capacity, continuing to grow services, continuing the growth of infrastructure," he added.

The Goldman Sachs report pointed out that India’s government has placed a priority on infrastructure creation, especially in the setting up of roads and railways. The country’s recent budget aims to continue the 50-year interest free loan programs to state governments in order to spur investments in infrastructure.

It believes that this is an appropriate time for the private sector to scale up on creating capacity in manufacturing and services in order to generate more jobs and absorb the large labor force.

The investment bank said in innovation and technology are going to be important for the India’s economic trajectory.

The report mentioned that the main downside risk for India's economic growth would be if the labour force participation rate does not increase.
 
“The labor force participation rate in India has declined over the last 15 years," the report noted, underlining that women’s participation rate in the labor force is “significantly lower" than men’s. (KNN Bureau)