India is expected to overtake Germany to become the fourth-largest economy in 2026 and Japan to become third-largest in 2034, according to a recent report by the UK-based Centre for Economics and Business Research (CEBR).
It further said India is also set to reach a gross domestic product (GDP) of $5 trillion by 2026, 2 years later than the government's target.
"India has decisively overtaken both France and the UK to become the world's fifth-largest economy in 2019. It is expected to overtake Germany to become fourth largest in 2026 and Japan to become the third largest in 2034," the report, titled 'World Economic League Table 2020', said.
Japan, Germany and India will battle for the third position over the next 15 years, according to the CEBR.
Referring to Prime Minister Narendra Modi-led government's target of taking the economy to $5 trillion by 2024, it said, "India is also set to reach a GDP of $5 trillion by 2026 - 2 years later than the current government target."
But, dark clouds gathering all over the economy are leading many to question the maintainability of the target.
Recently, former Reserve Bank governor C Rangarajan, said that at the current growth rate, reaching the USD 5-trillion GDP target by 2024-25 is "simply out of question".
Noting that Indian data revisions mean that 2019 was the year when the country's economy finally overtook the UK and France, the report said, "But, slow growth during the year has increased pressure for more radical economic reforms."
Despite the rapid ascent of countries such as India and Indonesia, it is striking how little an impact this will have on the US and China's dominant roles in the global economy, said Pablo Shah, senior economist at CEBR.
India, which till recently was hailed as the world's fastest-growing major economy, has seen a growth rate decline to a six-year low of 4.5 per cent in the September quarter of 2019-20.
This has largely been attributed to the slowdown in investment that has now broadened into consumption, driven by financial stress among rural households and weak job creation.
The World Economic League Table is an annual calculation by Cebr jointly published by CEBR and Global Construction Perspectives. The base data for 2019 is taken from the IMF World Economic Outlook.