India is really unique because it has a large population, 1.2 billion people—and rising. It also has a very young population, with half the population under 25 years.
- Tushar Poddar
A View from India
Tushar Poddar, chief India economist in our Global Investment Research Division, discusses the growth potential of India's economy and some of the challenges it faces.
Additional Insights on India from Tushar Poddar
- India’s economic growth over the last decade has been quite remarkable: real GDP growth was approximately 8% annually over that period, driven by a combination of rising investment as well as consumption demand and greater productivity growth.
- India will play an increasing role in the global economy as demand from a growing working-age population will continue to drive consumption demand. We estimate that over the next decade as this population earns, consumes and saves more, these factors could contribute about 4% annually to India's GDP.
- The country's demographic dividend will be substantial over the next couple of decades. India will add about 110 million workers to its labor force over that time, which is more than the U.S., China, Russia and Japan will add combined.
- Governance is going to be a critical challenge and has been over the past few years, and the way India resolves it would also affect its potential growth rates. A lot is being done, but it remains to be seen whether these changes will have a material impact on the economy's growth over time.