Morgan Stanley report on the Indian Economy

According to a recent Morgan Stanley report on the Indian economy estimation India will start growing faster than China in 2013. The report holds the demographic dividend, supported by continuing economic reform and globalisation as reason for its assumptions. The growth would be fostered by India’s declining trend in the share of non-working dependents (children and the elderly) in the population. India would contribute 136 million people to the workforce while China will add just 23 million. The report is also based on the assumption that India’s infrastructure spending would rise and also there would be steady improvement in educational levels and sustained fiscal consolidation. However the report pointed out that internal schism would remain a threat. Maoist violence and terror and violence enabled by and emanating from communal politics would act as major sources of disruption. The report however does not take into account political risks while making the estimations.