India’s share in global consumption will be 16 percent by 2050

India’s share in global consumption on purchasing power parity (PPP) basis is projected to be 16 percent by 2050, up four percent from 1997 and nine percent by 2023. McKinsey Global Institute’s analysis World Data Lab, in its report ‘Dependency and Population Decline: Implications of the Consequences of the New Demographic Reality’ released recently, said that by 2050, only North America will have a higher consumption than India with a 17 percent share.

PPP is a way of comparing the values โ€‹โ€‹of different currencies by adjusting for price differences across countries. In the race for development in the next quarter century, the developed countries, including the emerging countries of Asia, will be followed by the countries and regions experiencing a decline in population growth rate (later wave). Therefore, Latin America and the Caribbean, West Asia and North Africa, India and Sub-Saharan Africa will account for more than half of global consumption.

Later wave are those countries and regions where the fertility rate has declined after the developed countries. During this period, the share of developed Asia, North America, Greater China, Western Europe, and Central and Eastern Europe in global consumption may decline from 60 percent in 1997 to only 30 percent by 2050.

According to the research, this change can have important impacts โ€“ like as income and consumption increases in India, domestic and multinational companies will change their products and services to suit the needs of the people. The report highlights that the population balance will change by 2050 due to a rapid decline in fertility rates. Only 26 percent of the world’s population will live in ‘first wave’ areas, whereas this region contained 42 percent of the population till 1997. By the year 2050, the remaining population will live in later wave regions and sub-Saharan Africa countries. The result will be a shift of labor to later wave sectors and two-thirds of labor hours globally will be from this sector.

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Research about India has revealed many interesting facts on many issues including the aid ratio. Help ratio is the working population to help people over the age of 65 years. The first interesting fact is that India’s recent aid ratio is 9.8 and this ratio will fall to half by 2050 due to the range of births and deaths and life expectancy. In this sequence, the aid ratio will fall to 1.9 percent by 2100 and it will be equal to present-day Japan.

Second, India’s population in the world was 23 percent by 2023 and it will fall to 17 percent by 2050. India’s population will fall to 15 percent of the world population by 2100. India’s population will be 150.5 crore by 2100 and this will be 5 percent more than in 2023. India’s fertility rate fell below the replacement rate in 2019. The replacement rate is the average number of children a woman needs to maintain the population.

Higher participation of women in India’s labor force will bring significant change. According to research, if India increases women in its labor force by 10 percent, its per capita gross domestic product (GDP) will increase by 4-5 percent.

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