MUMBAI: The size of the Indian economy will treble over the next 10 years, according to a new report by HSBC. India will be a $7-trillion economy by 2028, surpassing Germany ($6 trillion) and Japan ($5 trillion) to become the third largest economy in the world, says the report.
India’s GDP is currently around $2.3 trillion and it stands at the fifth spot in global rankings. To expand its economy, India needs to be consistent in reforms and focus more on the social sector, the report adds.
According to the British brokerage, India’s current spending on health and education will need to go up considerably. It says a robust social sector is central to India’s economic growth and political stability.
While the brokerage cautions that India may grow at a slower pace in FY18 due to the introduction of goods and services tax (GST), it is hopeful that the economy will recover from next year in a sustainable fashion.
"There are limits to one-off reforms. India needs to create an ecosystem of continuous change," it said.
Explaining how GST could impact economy, HSBC said it’s the informal enterprises that create bulk of the jobs in the country and these might respond to higher taxation by laying off workmen or simply shutting shop.
On the positive side, it said the e-commerce sector will create 12 million jobs over the next decade. The social sector, where a lot of work needs to be done on health and education fronts, can also generate jobs, it noted.