Nov. 17 – According to an Enam Securities report India’s GDP is “likely to grow at (an) average 12 percent in nominal terms. Hence, India will be a US$2-trillion economy by 2014-15.”
The research report called “India Strategy,” led by research head, Nandan Chakraborty, and economist Sachchidanand Shukla said that India’s growth will be led by the huge consumption demand in sectors like FMCG, power, auto (small car hub), IT and pharmaceuticals.
The brokerage firm said insurance companies, financial services firms and equity markets will flourish as the country’s annual savings pool grows to US$700 billion from US$400 billion.
“More than half of this is expected to flow into financial savings. With favorable demographics and an average seven percent real growth, India can sustain more than 30 percent savings rate akin to the Asian tigers, or China and Japan. This will transform the domestic financial services space,” Enam said. Life insurance penetration in India, which is already a US$1 trillion economy, is estimated to increase by 4.4 percent over the next two years as insurance companies focus on expanding into rural India.
This compares to about 50 percent of the current value of China’s economy which is estimated to be about US$4 trillion at present. China’s GDP growth is slowing and the figures may require adjusting if the renminbi strengthens as is expected to occur. This could possibly mean that the Indian economy is valued at about 2/3 the size of China’s by 2015.
