According to a new study by Harvard University, India has emerged ahead of China as the economic pole of global growth. The study also says that India is expected to maintain this lead over the coming decade. With an average annual growth rate of 7.7 per cent, the country can be seen on the top of the list of fastest growing economies of the world in 2025.
The Center for International Development (CID), the university-wide center of the Harvard that carries out researches on sustainable international development, suggested that over the past few years, the economic pole of global growth has shifted to India from its neighbor China, and is likely to stay here over the coming decade.
According to the study, the rapid growth prospects of India can be attributed to the fact that it is well positioned to continue diversification into new arenas.
The Economic Times quotes the growth projection by CID saying,
India has made inroads in diversifying its export base to include more complex sectors, such as chemicals, vehicles, and certain electronics. The major oil economies are experiencing the pitfalls of their reliance on one resource. India, Indonesia and Vietnam have accumulated new capabilities that allow for more diverse and more complex production that predicts faster growth in the coming years.
Pointing out that economic growth does not follow an easy pattern, the study further said,
The countries that are expected to be the fastest growing – India, Turkey, Indonesia, Uganda, and Bulgaria – are diverse in all political, institutional, geographic and demographic dimensions. What they share is a focus on expanding the capabilities of their workforce that leaves them well positioned to diversify into new products and products of increasingly greater complexity.
The projection divided economies into three broad categories. The first category has countries that have “too few productive capabilities” to be able to diversify into related products. The second category includes countries that have sufficient capabilities that allow diversification and growth easily such as India, Indonesia and Turkey. The third and last category includes countries like US, Germany and Japan that have produced nearly all existing products. The progress of these countries requires invention of new products, which is a process of slower growth.
According to the projections of the study, growth in emerging markets is expected to continue to surpass that of developed economies.