Supercycle 3 is here for us says, Standard Chartered

Standard Chartered has come out with a report that the world is in the throes of a third supercycle of growth. Supercycle is a period of historically high global growth lasting a generation or more driven by increasing trade, high rates of investment, urbanization and technological innovation.


It says the first supercycle from 1870 to 1913 -saw the rise of the US.
The second supercycle was from 1946 to the mid-70s - saw the rise of Japan and East Asia and
The latest supercycle from around 2005 to 2030 which will see China and India as the winners of the game.

Supercycle theory
The world economy is still doing quite well despite all the problems.  The world economy now is twice the size it was a decade ago. The world economy now (USD 64 trillion) is bigger than it was before the euro crisis began. However one should not ignore the fact that there are problems in the near-term in the US, in Europe.

One also should acknowledge that the business cycle still exists in India, in China and indeed  there are near-term setbacks, that there are variations along the way but the clear underlying message is that the upper trend is very evident. In this calendar year for instance, the emerging world which counts for one-third of the global economy is accounting for two-thirds of global growth. It is evident that a shift in the balance of economic and financial power shall move from west to east (from dollar/ euro/ yen to yuan/ rupee/ rouble).

India in the next 20 years will probably do in some respect what Japan did from 1945 upto the early 70s. Then Japan went from about 2-3% of global growth to about 10%.

The economy of India is the eleventh largest economy in the world by nominal GDP and the fourth largest by purchasing power parity (PPP).Following strong economic reforms from the socialist inspired economy of a post-independence Indian nation, the country began to develop a fast-paced economic growth, as free market principles were initiated in 1990 for international competition and foreign investment. India is an emerging economic power with a very large pool of human and natural resources, and a growing large pool of skilled professionals.  Economists predict that by 2020, India will be among the leading economies of the world. According to the BRIC report, published by Goldman Sachs, India will be the second largest economy after China by 2043.

India's large service industry accounts for 55% of the country's Gross Domestic Product (GDP) while the industrial and agricultural sector contribute 28% and 17% respectively. Agriculture is the predominant occupation in India, accounting for about 52% of employment. The service sector makes up a further 34%, and industrial sector around 14%. The labour force totals half a billion workers.  Major industries include telecommunications, textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, information technology enabled services and pharmaceuticals.

From 2004 until 2010, India's average quarterly GDP Growth was 8.37 percent reaching an historical high of 10.10 percent in September of 2006 and a record low of 5.50 percent in December of 2004.

India's per capita income (nominal) is $1,030, ranked 139th in the world, while its per capita (PPP) of US$2,940 is ranked 128th. India currently accounts for 1.5% of World trade as of 2007 according to the WTO. According to the World Trade Statistics of the WTO in 2006, India's total merchandise trade (counting exports and imports) was valued at $294 billion in 2006 and India's services trade inclusive of export and import was $143 billion. Thus, India's global economic engagement in 2006 covering both merchandise and services trade was of the order of $437 billion, up by a record 72% from a level of $253 billion in 2004. India's trade has reached a still relatively moderate share 24% of GDP in 2006, up from 6% in 1985
http://en.wikipedia.org/wiki/Economy_of_India

The numbers does matter

India shall go on for with a growth rate of  at just about 9-9.5% on average over the next 20-year period.
and factored in a pretty cautious growth rate for China of 6.9%, Its economy is expected to expand by 8.5% this year. It has a long way to go before it is as rich as China—the Chinese economy is four times bigger—but its growth rate could overtake China’s by 2013, if not before . Some economists think India will grow faster than any other large country over the next 25 years. Rapid growth in a country of 1.2 billion people is exciting.

The world economy next year probably will be USD 64.7 trillion economy. In cash terms, nominal terms allowing for inflation as well as growth, the world economy could have grown to over USD 300 trillion by 2030. In real terms take in accounts of inflation and take in accounts of some appreciation of some of the major currencies, the world economy probably would have grown to somewhere between USD 125 trillion and USD 143 trillion by 2030. So in real terms the world economy would probably more than double over the next 20 years.
India share in that growth, will be an important contributor to that growth. so what will be its ???? percentage to world economy

why and how will India start to outpace China.

One is demography. China’s workforce will shortly start ageing; in a few years’ time, it will start shrinking that’s because of its one-child policy.
India is now blessed with a young and growing workforce. Its dependency ratio—the proportion of children and old people to working-age adults—is one of the best in the world and will remain so for a generation. India’s economy will benefit from this “demographic dividend”, which has powered many of Asia’s economic miracles. The proportion of Indians aged under 15 or over 64 has declined from 69% in 1995 to 56% this year, says the UN. India’s working-age population will increase by 136m by 2020; China’s will grow by a mere 23m, says Morgan Stanley


The second reason for optimism is India’s much-derided democracy. The notion that democracy retards development in poor countries has gained currency in recent years. Certainly, it has its disadvantages. Elected governments bow to the demands of selfish factions and interest groups. Even the most urgent decisions are endlessly debated and delayed.

China does not have this problem. When its technocrats decide to dam a river, build a road or move a village, the dam goes up, the road goes down and the village disappears. The displaced villagers may be compensated, but they are not allowed to stand in the way of progress. China’s leaders make rational decisions that balance the needs of all citizens over the long term. This has led to rapid, sustained growth that has lifted hundreds of millions of people out of poverty. Small wonder that authoritarians everywhere cite China as their best excuse not to allow democracy just yet.

Since the early 1990s, when India dismantled the “licence raj” and opened up to foreign trade, Indian business has boomed. The country now boasts legions of thriving small businesses and a fair number of world-class ones whose English-speaking bosses network confidently with the global elite. They are less dependent on state patronage than Chinese firms, and often more innovative: they have pioneered the $2,000 car, the ultra-cheap heart operation and some novel ways to make management more responsive to customers. Ideas flow easily around India, since it lacks China’s culture of secrecy and censorship. That, plus China’s rampant piracy, is why knowledge-based industries such as software love India but shun the Middle Kingdom.

India’s individualistic brand of capitalism may also be more robust than China’s state-directed sort. Chinese firms prosper under wise government, but bad rulers can cause far more damage in China than in India, because their powers are so much greater. If, God forbid, another Mao were to seize the reins, there would be no mechanism for getting rid of him.
That is a problem for the future. For now, India’s problems are painfully visible. The roads are atrocious. Public transport is a disgrace. Many of the country’s dynamic entrepreneurs waste hours each day stuck in traffic. Their firms are hobbled by the costs of building their own infrastructure: backup generators, water-treatment plants and fleets of buses to ferry staff to work. And India’s demographic dividend will not count for much if those new workers are unemployable. India’s literacy rate is rising, thanks in part to a surge in cheap private schools for the poor, but it is still far behind China’s.
Advantage India
The Indian government recognises the need to tackle the infrastructure crisis, and is getting better at persuading private firms to stump up the capital. But the process is slow and infected with corruption. It is hard to measure these things, but many observers think China has done a better job than India of curbing corruption, with its usual brutal methods.

Given the choice between doing business in China or India, most foreign investors would probably pick China. The market is bigger, the government easier to deal with, and if your supply chain for manufactured goods does not pass through China your shareholders will demand to know why. But as the global economy becomes more knowledge-intensive, India’s advantage will grow.

 need to read more:
http://www.moneycontrol.com/news/economyindia39s-gdp-to-grow-at-93avg-till-2030-stanchart_500370.html