India not the next China, but the next India: World Bank Chief Economist
Washington, June 11
India has entered a phase of "peak development potential" and is poised to sustain high growth over the next two decades, the World Bank's Chief Economist Indermit Gill said, arguing that the country's economic trajectory will be driven by its own strengths rather than by following China's development model.
During a briefing on the World Bank's latest Global Economic Prospects report, Gill told IANS that India stands out among major economies because its long-term growth potential remains strong even as many countries face demographic decline and slowing productivity.
"If you look at India over the next two decades, India has entered its peak development potential," Gill said.
He noted that while potential growth rates in several large economies are expected to decline in coming years, India's growth potential remains comparatively strong.
"Potential growth rates for India, we estimate to be fairly high for the next two decades," he said.
According to Gill, one of India's biggest advantages is its demographic profile.
"On the demographic side, India's demographics work for it," he said.
He also pointed to relatively low private-sector debt levels and a consumption-driven economy as factors supporting India's long-term outlook.
"On the debt side, especially private debt, India has relatively low debt-to-GDP ratios on the private side," Gill said.
Unlike export-led Asian growth models of the past, India is expected to draw strength from its domestic market, he argued.
"India's domestic consumption to GDP ratios are very normal. They're close to 60-something per cent," Gill said.
He then offered a striking assessment of India's future path.
"India's not going to be the next China, India's going to be the next India," Gill said.
At the same time, the World Bank economist cautioned that India must address structural weaknesses if it wants to fully capitalise on its favourable conditions.
"One of them has to do with openness. India has to become a much more open economy," he said.
Gill also called for stronger efforts to attract investment.
"India could do a lot more to get private investment going again, especially foreign direct investment," he said.
He said the country would need both "business-friendly reforms" and "trade-friendly reforms" to maximise its growth opportunities in the coming decades.
The comments come as the World Bank projects global growth to slow to 2.5 per cent in 2026, the weakest pace since the Covid-19 pandemic, amid disruptions linked to the conflict in the Middle East and rising energy costs.
India, however, continues to stand apart from much of the developing world. The World Bank's latest projections show the country remaining the fastest-growing major economy, reflecting a combination of favourable demographics, expanding domestic demand and continued economic reforms.
— IANS
Reader Comments
I agree with the optimism but we need to be realistic. Our demographic dividend could become a liability if we don't create enough jobs. Young population is great only if they have employment. Also, private debt being low is good but what about government debt? Still, nice to hear World Bank praise India.
"India will be the next India" - that's going to be my new LinkedIn bio! 😄 Jokes aside, this is exactly what we need to hear. Not comparing ourselves to others, but focusing on our own strengths. But that point about FDI and openness is critical - we're still too protectionist in many sectors.
As an economist myself (though not at World Bank level!), this analysis makes sense. India's demographic window is real - China's working-age population peaked in 2012, India's will peak around 2040. That's a massive 16-year advantage. The key is whether India can build enough infrastructure and human capital in that time.
I'm cautiously optimistic. We have all the ingredients - young population, growing middle class, stable democracy. But structural reforms take decades. Look at our education system, healthcare, judicial delays... These don't get fixed overnight. Still, better to hear "peak development potential" than "growing at China's pace" - that was always unrealistic.
Interesting perspective from an Indian-origin economist at World Bank. The point about openness is crucial - India's FDI inflows have been declining since 2020. We need to improve ease of doing business at the state level. But
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