New Delhi, Oct 10 (IANS): India needs to target an 8 per cent annual economic growth, with more investments in traditional sectors such as mining, utilities, transport, and storage, in order to surpass China as the biggest contributor to world GDP, according to a Barclays Plc report released on Tuesday.

Investments in those sectors have taken a back seat in recent years compared to newer industries, such as telecommunications and the digital sector, Rahul Bajoria, a senior economist at Barclays, wrote in the report.

More investment, especially in traditional sectors, should also have a positive impact on employment and household income, and this could help policy makers to formulate better policies for economic growth, he added.

Citing IMF data, the Barclays report states said China’s contribution to global gross domestic product is estimated at about 26 per cent in the five-year period through 2028. India’s contribution is estimated at 16 per cent, based on a GDP growth rate of 6.1 per cent over the period. With 8 per cent growth, India’s contribution would almost be at par with China’s by 2028.

In 2023, while India's growth has slowed, the report says that it has remained higher than its global peers along with "ample macro stability".

The government, it says, is also focused on managing inflation. But despite being the fastest growing major economy (ex-China) over the past decade, when it comes to contribution to global GDP, India has remained in the 10 per cent handle. Currently, India accounts for a "much smaller share of the global economy than China" and even lower than the US.

India’s government has stepped up infrastructure spending in the past few years, allocating a record Rs 10 lakh crore in the current fiscal year through March 2024. Prime Minister Narendra Modi aims to boost India’s economy to $5 trillion by 2024-25, from about estimated $3.7 trillion currently.