NEW DELHI: India, pushed back to being the world’s sixth biggest economy in 2020, will again overtake the UK to become the fifth largest in 2025 and reach the third spot by 2030, a global tracking agency has said.
The UK-based Centre for Economics and Business Research (CEBR) also said China will become the world’s largest economy by year 2027, overtaking the US.
The growth trajectory will see India overtaking UK in 2025, Germany 2027 and Japan by 2030 to position itself as the world’s third largest economy – after the US and China – it said.
The agency said Indian economy will expand by nine per cent in 2021 — from the present minus growth level — and seven per cent the next year. As India’s economy develops, growth will be slower and touch around five plus per cent annually by 2035, the agency added.
India had overtaken the UK in 2019 to become the fifth largest economy but has fallen back to 6th spot in 2020. “India has been knocked off course somewhat through the impact of the pandemic. As a result, after overtaking the UK in 2019, the UK overtakes India again in this year’s forecasts and stays ahead till 2024 before India takes over again,” the Centre for Economics and Business Research (CEBR) said in an annual report published on Saturday.
The UK appears to have overtaken India again during 2020 as a result of the weakness of the rupee, it said.
India’s rate of growth sank to a more than 10-year low of 4.2 per cent in 2019. This was down from 6.1 per cent in 2018, and 8.3 per cent in 2016 – the year when the NDA government led by Prime Minister Narendra Modi took charge of the nation from the UPA government led by Dr Manmohan Singh.
India’s slowing growth has been a consequence of the confluence of factor like the fragility of the banking system (plagued by bad loans, taken and not repaid by businessmen), adjustment to reforms (like the GST, unification of market taxation system) and deceleration of global trade, the agency has stressed.
Indian economy was sinking even before the Covid pandemic arrived in year 2020 March, the agency noted, and added that for India this was both a human and economic catastrophe, killing as high as 1,40,000 infected people by December.
The agency said the GDP growth in April-June period in 2020, plagued by the shutdown and series of lockdowns—nation-wide and region-specific since March end – fell by 23.9 per cent below the 2019 level. This meant that more than a quarter of the nation’s economic activity was wiped out by the drying up of global demand and domestic demand.
It said an important driver of India’s economic recovery this year was the agriculture sector which saw a bountiful harvest. In the medium to long term, the 2016 demonetisation and reforms like the one introduced now in the agriculture sector will help India grow faster, it added.
India, it noted, has a lot of scope to develop its infrastructure. If money is spent on infra development now, this will help accelerate the economy. IHN NN
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