India’s economy must maintain an average growth rate of 7.8% over the next several decades to achieve high-income status by 2047, according to a new report from the World Bank, as per Bloomberg.
The Washington-based organization released its findings on Friday:
“For India to become a high-income economy by 2047, its gross national income per capita would have to increase by nearly 8 times over the current levels.”
The report comes as India prepares to release its latest gross domestic product (GDP) figures. While the economy is expected to show a rebound in the most recent quarter, growth prospects remain uncertain due to escalating geopolitical tensions. India is projected to expand at 6.4% for the current fiscal year, marking its slowest pace since the pandemic.
While India is currently on track to achieve upper middle-income status by 2032, the World Bank emphasizes that an additional two decades of “very high growth” are necessary to reach its ambition of becoming an advanced economy by 2047 – the 100th anniversary of its independence from Britain.
According to the World Bank, India’s gross national income per capita stood at $2,540 in 2023. To reach high-income status, this figure would need to rise to $20,000 by 2047.
The report highlights the difficulty of transitioning from middle to high income, noting that only a limited number of countries have achieved this feat in under two decades. Many nations, including Brazil, Malaysia, Mexico, and South Africa, have remained trapped in the middle-income bracket for over 20 years, the lender noted.
The World Bank recommends that India focus on capital investment, labor reforms, and productivity enhancement to achieve its ambitious growth targets.
Furthermore, the report stresses that India has a limited timeframe to capitalize on its demographic dividend. Projections indicate that the dependency ratio – the number of dependents (children and elderly) relative to the working-age population – will increase from 45% in 2032 to 49% in 2050.
