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India likely to be world's largest economy by 2050: Citi

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In view of its continuing robust growth, India is expected to be the world's largest economy by 2050, surpassing China and the US, a Citi report said.  The estimates are based on purchasing power parity (PPP), an economic growth indicator that takes into account the purchasing power of each country's currency, instead of the prevailing exchange rate conversion (GDP nominal).

Indian economy is expected to be nearly $ 85.97 trillion on PPP basis by 2050 from $ 3.92 trillion in 2010, Citi said. In terms of PPP, Indian economy -- valued at $ 3.78 trillion -- was at the fourth place in 2009. The country was behind the US, China and Japan, according to the World Bank.

Citi emphasised that a number of major changes within a relative short time are required for India to meet future challenges.

Noting that India's infrastructure has to be improved, Citi said the country needs to relax its "hostile attitude towards FDI", if it is to reap the benefits of rapid cross-border technology transfer that China has benefited from so greatly. 

"...a further round of serious deregulation of the domestic economy and further trade liberalisation are required," it noted.

The report said India's population of working age is expected to grow by 40.7 per cent between 2010 and 2050.

India has successfully raised its aggregate savings rate to levels that would allow sustained high levels of domestic capital formation (the domestic saving rate averaged 34.4 percent over 2006-2009 and the gross domestic investment rate 32.4 percent), the report added.