There are huge expectations for India’s GDP growth, with its 1.4 billion population on track to overtake China as the world’s largest. According to Goldman Sachs Research, India would have the second-largest global economy by 2075.

According to Santanu Sengupta, economist for India at Goldman Sachs Research, India must concentrate on increasing labour force participation and offering training and skill development for its large talent pool in order to fully utilise the potential of this expanding population. Sengupta emphasises that during the next twenty years, India’s reliance ratio will be among the lowest among the economies of the area. The favourable ratio of the working-age population to dependents offers India a window of opportunity to strengthen its manufacturing sector, expand its services industry, and make infrastructure investments.

Sengupta emphasises the significance of worker productivity growth and innovation for India’s economy. Although they are helpful, demographics cannot drive GDP growth on their own. A key step on India’s path to become the world’s fifth-largest economy will be increasing output per unit of labour and capital in the economy.
A big growth driver is anticipated to be capital investment as well. India’s savings rate is anticipated to rise due to favourable demographics, declining dependency ratios, rising earnings, and deeper financial sector growth. As a result, there will be a larger pool of capital available to support additional investments.

Regarding the switch to green energy, the economist for India at Goldman Sachs Research sees opportunities. The nation has set lofty targets, hoping to achieve net-zero emissions by 2070 and 50% non-fossil energy capacity by 2030. The government has set a goal of 500 GW of renewable or clean energy capacity by 2030 and is actively supporting electric cars (EVs) and green hydrogen. Even while making the switch to green energy offers a significant investment opportunity, it will take time. Until the transition is fully realised, fossil fuels will continue to be India’s main source of energy.

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