“China’s investment rate has always been higher than India’s (although by a relatively narrow margin in the late 2000s). To achieve China’s growth rate of the last decade, India would have to boost its investment rate by 10 per cent points or so of GDP,” it said, adding that this is not impossible.
It termed this as a “momentous shift” which will be taking place, and added that this is going by the share of world GDP in dollar terms. India will equal to China’s 4.9 per cent share of world GDP in 2005 by the middle of next decade, it said, adding that if the country grows faster, the date can be advanced.
The expectation comes days after official data suggested the Indian GDP grew 7.6 per cent in fiscal year 2015-16 on the back of a faster 7. 9 per cent growth in the last quarter.
The presence of a pro-growth, reform oriented regime at the Centre, along with fundamental factors like favourable demographics which make it among the youngest nation in the world, and large consumer base, is making analysts more confident about the India story, HSBC said.
China, which embarked on its reforms from the early 1980s, grew at double digits to lead the global growth on its shoulders after the post-Lehman crisis. (SH)
Fibre2Fashion News Desk – India
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