A Morgan Stanley report says that India’s millennial population is a massive disruptive force and driven by these supportive demographics along with government’s policy action, Indian economy is likely to reach $5 trillion by 2025.
- India’s $2.2 trillion economy makes it the seventh largest in the world in terms of nominal GDP (and the third largest in PPP terms), but the country’s per capita income is less significant.
- With a per capita income of $1,700, India ranks well behind some of the key emerging markets, like China, Russia, Brazil, Indonesia, the Philippines, Mexico, and Turkey.
- A confluence of supportive factors, led by demographics, government policy action, and globalization, to lead to a sustained period of productive growth in the medium term.
- Morgan Stanley expects per capita income to rise 125 per cent to $3,650 by financial year 2024-25.
- The report said India’s millennial population of 400 million is the largest in the world and is armed with around $180 billion in spending power and with high Smartphone adoption and widespread availability of mobile broadband infrastructure; it will become a disruptive force faster than most businesses expect.
- The population dynamics will therefore be a key force in shaping India’s overall growth trajectory and also in shaping how product markets will develop as the preferences of the population evolve, Morgan Stanley said.
- The demographics factor alone is not sufficient for acceleration in GDP growth. It is important that the working age population is adequately skilled to participate in a globalised competitive environment.
- The next leg of harnessing this young and better skilled population would require creation of adequate employment opportunities, which is an opportunity and a challenge for India.
Morgan Stanley is an American multinational financial services corporation headquartered in the Morgan Stanley Building, Midtown Manhattan, New York City. Morgan Stanley operates in 24 countries and has more than 1300 offices and 60,000 employees. According to the Scorpio Partnership Global Private Banking Benchmark, the company had $1.454 trillion of assets under management (AUM) in 2014, an increase of 17.5% over its 2013 figure.