India will be 3rd largest economy by 2028: HSBC

NewsBharati 21-Sep-2017

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London, September 21: HSBC said that India is likely to overtake Japan and Germany to become the third largest economy in the next 10 years. The report by HSBC said that India needs to spend on aspects like health and education for the sake of economic growth and political stability.

The report picked out e-commerce sector as the focus of employment saying it will create 12 million jobs over the next decade. Demographics and macro stability were pointed out as key strengths for the country by the brokerage.

Its estimates show India will be a $7 trillion economy in 2028, as compared to less than $6 trillion and $5 trillion for Germany and Japan, respectively. Presently, India’s GDP is around $2.3 trillion (fiscal 2016-17). It stands at the fifth spot in global rankings.

The brokerage said the growth rate, which will be lower in FY18 as compared to the year-ago’s 7.1% due to the introduction of Goods and Services Tax (GST), will recover from next year in a sustainable fashion.

Citing the case of GST, it said the informal enterprises that create a bulk of jobs in the country may respond to higher taxation by shutting shop or laying off workmen.

With concerns being raised about jobless growth, it said the e-commerce sector will create 12 million jobs over the next decade, which is half of the 24 million shortfall.

India will continue to be a services oriented economy but needs to pay extra attention on manufacturing and farm sectors as well, it said, adding that it would be desirable to maintain the contribution of manufacturing, agriculture and services at the current levels.

The Indian story will be different from the export-oriented one of China’s, it said, pointing out that domestic consumption with over 550 million consumers will be the standout factor.