17.3.10

India 2018

India will overtake China to become world’s fastest growing economy by 2018, says the Economist Intelligence Unit (EIU), the research arm of London-based Economist magazine. A higher percentage of working population gives India a demographic edge over China and this will ensure that India’s growth rate will continue to remain on the higher side, said Anjalika Bardalai, senior analyst at EIU. At present, China is the fastest growing economy in the world. Bardalai said considering strong fundamentals, “our long-range forecast suggests that India will sustain an average annual growth rate of 6.4% to 2030.’’ India will take the lead not because its growth rate is likely to attain doubledigit level, but due to the fact that China’s growth rate will moderate with development of its economy, she added. However, for the current financial year, Bardalai said Indian economy would only grow at 6.8%. But this is not comparable with the figure of 7.2% projected by the government as EIU has adopted a different methodology to calculate the rate. “Our projection is based on expenditure in the economy and is not on factor cost as done by the Indian government,’’ she explained. She said growth will pick up to 7.7% in 2010-11 and 8% in 2011-12. “Continued strong domestic consumption, spurred by rising income and a growing middle class, will be the primary drivers behind India’s growth. At the same time, high savings and investments will also help India achieve the higher growth rate.’’

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