Tuesday 20 October 2020

India to surpass Japan to become the third largest economy by 2050

Niti Aayog vice chairman Rajiv Kumar in May this year said India should aspire to become the 3rd largest economy by 2047

The Indian economy is set to become the third largest in the world behind China and the US by 2050 and retain the same position in 2100, a study published in the medical journal Lancet found by translating working age population of countries into scenarios for total GDP.

Taking 2017 as the base year when India was the seventh largest economy, the Lancet paper said India will move up to become the fourth largest economy behind the US, China, Japan by 2030 and subsequently will overtake Japan in 2050. India is currently the fifth largest economy in the world, closely followed by France and UK.

Indian government’s aspirations are on similar line. Niti Aayog vice chairman Rajiv Kumar in May this year said India should aspire to become the 3rd largest economy by 2047. However, the current estimates are less optimistic compared to some earlier projections, possibly reflecting the economic slowdown due to the coronavirus pandemic. A study by Japan Centre for Economic Research in December last year, just before the outbreak of the pandemic said India would surpass Japan to become the third largest economy by 2029. Indian government’s own ambitious target to become a $5 trillion economy by 2025 is also set to be missed post the pandemic.

The Lancet paper warned that there would be huge declines in working age population in China and India, alongside steady increases in Nigeria, though India would maintain the top position. “By 2100, India was forecasted to still have the largest working-age population in the world, followed by Nigeria, China, and the USA. In our reference scenario, despite fertility rates lower than the replacement level, immigration sustained the US workforce,” it added.

Other countries bolstered by immigration that rose up in the global rankings by GDP were Australia and Israel. Despite huge declines in population forecasted this century, the paper said Japan will remain the fourth-largest economy in 2100.

The key findings of the paper suggest that continued trends in female educational attainment and access to contraception will hasten declines in fertility and slow population growth. “A sustained TFR (total fertility rate) lower than the replacement level in many countries, including China and India, would have economic, social, environmental, and geopolitical consequences. Policy options to adapt to continued low fertility, while sustaining and enhancing female reproductive health, will be crucial in the years to come,” it said.

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