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An economist has said that India needs to work on its governance, education system, human resource needs and competitiveness
India can emerge as the world’s second-largest economy in the year 2039, bigger than the US, if its GDP continues to grow at the rate of 8%-9%, says a senior economist.
Former senior advisor and a director at the World Bank, Harinder Kohli, said that India’s average per capita income would jump 22 times from $940 two years ago to $22,000 in 30 years from now, in that scenario. “India’s footprint in the global economy will go to more than 17% in 2039 from less than 2% in 2007,” Mr Kohli said, reports PTI.
But he emphasised that this scenario can become a reality only if the current economic growth momentum is sustained over the next three decades. “It (India becoming the world’s
second-largest economy) could happen if things go well,” he said.
Mr Kohli warned against India getting caught in the “middle-income trap”, similar to the experience of Mexico and Brazil.
This trap was explained as one when countries start stagnating after reaching middle-income levels and don’t grow to advanced country levels.
Countries getting into such traps are unable to compete with low-income, low-wage economies in manufacturing exports and are also unable to compete with advanced economies in high-skill innovations.
Mr Kohli said that when countries reach the middle-income group, they need to do a lot of adjustments, required a very different governance & education system, have to address human resource needs and improve competitiveness, among others.
At that stage, India needs to improve the quality of its workforce and address issues such as inequality in terms of per capita income between different States, and start working on those matters “now itself” as it takes a long time to produce results.
In addition, he said that to meet its growing energy needs, India will have to tap hydro, nuclear and other renewable energy sources in a big way.
Also, India has to understand that it cannot do well economically, if its neighbourhood is not friendly, said Mr Kohli.