According to a report published by business consultancy firm PricewaterhouseCoopers (PwC), India is expected to overtake the United States economy by the year 2040 in terms of purchasing power parity (PPP). The report states that in just around two decades, India will be the second largest economy in terms of PPP, only after China. “In fact, China has already overtaken the US to become the world’s largest economy in PPP terms, while India currently stands in third place and is projected to overtake the US by 2040 in PPP terms,” PwC said.
The report projects that the current world order will witness a dramatic shift in the next 2-3 decades, as global economic power transitions from established advanced economies to emerging economies in Asia and elsewhere. The E7 (Brazil, China, India, Indonesia, Mexico, Russia and Turkey) would contribute almost 50% of the world GDP by 2050, whereas the contribution of G7 nations would reduce to around 20%. The report also says that Vietnam, India and Bangladesh could become the world’s fastest growing economies during the next 2-3 decades.
For such major transformation, the report says that emerging economies will have to implement structural reforms to improve macroeconomic stability, increase usage of renewable energy sources, and upgrade their political and legal institutions.