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As compared to China, though India’s economy stands where China was in 2007, its working-age population is relatively young — India’s median age is 11 years younger than China’s — and is expected to contribute to its GDP in the longer run. Also, the coming decade, projects Morgan Staley, will see the Indian economy growing at an average of 6.5% and China’s at 3.6%.
So what are the factors playing out in India’s favour? As per the New York-based investment management and financial services major, initiatives like goods and services tax (GST), major corporate tax cuts, and PLI schemes — all have contributed to making India’s a strong alternate to China. Like the neighbouring country, India is also pushing hard on increasing government investments in public infrastructures like roads and railways.
What’s more advantageous, says Morgan Stanley, is that India is spending heavily on scaling its digital infrastructure as well, which includes initiatives like Aadhaar. More such programmes, including an open network for digital commerce (ONDC), an initiative for all aspects of the exchange of goods and services over digital networks, will further improve the ease of doing business in the country, says Morgan Stanley.
Meanwhile, the IMF in September projected India will become the world’s third-largest economy after the U.S. and China by 2030 on rapid population growth and healthy manufacturing sectors. India had become the world’s fifth largest economy in the world in March-end 2022 after it replaced the U.K., which ruled the Indian sub-continent for around 200 years.
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