“It is probably too early to say with certainty that India will soon take its place as the world’s third largest economy behind China and the United States,” Press Trust of India (PTI) reports O’Neill as saying.
“But that moment might not be too far away,” he said in a recent commentary posted on the website of Project Syndicate.
“By 2017, India could surpass Italy and Brazil to become the world’s seventh largest economy; by 2020, there is a reasonable chance that it will overtake France and the United Kingdom to become the fifth largest.”
O’Neill is best known for coining the acronym BRIC — Brazil, Russia, India and China — in 2001.
O’Neill, a former chairman of Goldman Sachs Asset Management, is now an honorary professor of economics at Manchester University and chairman of the Review on Antimicrobial Resistance, among other roles.
He said a key feature of his research into the BRIC economies over ten years ago was that at some point during this decade, India would start to grow faster than China and continue to do so for dozens of years.
“India’s demographics are considerably better than China’s, and the size and growth rate of a country’s workforce is one of the two key factors that drive long-term economic performance and the other is productivity.
“Between now and 2030, the growth rate of India’s workforce will add as much to the existing stock of labour as continental Europe’s four largest economies put together,” he said.
O’Neill said India is less urbanised than China and it is in the early stages of benefiting from the virtuous forces that normally accompany that process.
However, he cautioned that when it comes to productivity, India has been a laggard.
“Unless it finds a way to improve, the country’s demographic profile could become a burden rather than a benefit,” he added.