A recent Morgan Stanley report by Chetan Ahya and Tanvee Gupta says that India is poised to accelerate its growth rate to 9-9.5% over 2013-15, and will become the fastest growing economy.
The report further forecasted India will significantly jack up its expenditure on infrastructure and in plant and machinery. Infrastructure expenditure has gone up from 5.4% of GDP in 2005 to 7.5% in 2009 and is poised to go up to 8% of GDP in 2010. Over 2012-17, the forecast is that India’s infrastructure spend would be $1 trillion as compared with $530 million over the previous five-year period.
Another assumption is on the quantity and quality of the young people coming into the workforce. While India will be the largest contributor to the world’s workforce — all of 136 million people — over the next 10 years, China will add just 23 million.
