World Bank’s latest report, discuss about Becoming a High-Income Economy in a Generation, which outlines India’s path to high-income status by 2047.
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1.
Gross National Income
Understanding Gross National Income (GNI) per capita is crucial in this context.
The World Bank classifies economies based on GNI per capita:
Low-income: $1,145 or less
Lower middle-income: $1,146 – $4,515
Upper middle-income: $4,516 – $14,005
High-income: More than $14,005
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2.
GNI vs. GDP
India’s current GNI per capita stands at $2,540. In purchasing power parity (PPP) terms, the GNI per capita is $10,020
India’s Gross National Income (GNI) is approximately $3.63 trillion USD, reflecting a 6.94% increase from 2022.
The World Bank’s high-income threshold changes yearly, starting at $6,000 GNI per capita in 1987, reaching $14,005 by 2023, reflecting economic growth and inflation adjustments over time.
GNI = GDP + Factor incomes received from non-residents by residents – Factor incomes paid by residents to non-residents.
This provides a more accurate measure of economic well-being.
3.
India’s Growth Target for 2047
India should sustain an average annual growth rate of 7.8% to reach high-income status.
Achievements so far:
Average growth of 6.3% (2000-2023)
Economy has grown nearly 4x since 2000
Share in global economy doubled (1.6% in 2000 to 3.4% in 2023)
5th largest economy globally
However, the business-as-usual approach is insufficient to meet the 2047 target.
Countries like Chile, Korea, and Poland successfully transitioned to high-income status by deepening global economic integration. At present 86 countries are in high income group. There are several drop outs like Venezuela, Mauritius, argentina
4.
Key Policy Action
World bank suggested – India to follow suit by:
- Expanding structural reforms
- Strengthening macroeconomic stability
- Leveraging digital transformation
Key Policy Actions for Sustained Growth
- Increasing Investment
- Raise total investment from 33.5% of GDP to 40% by 2035.
- Strengthen financial regulations and FDI policies.
- Ease credit access for MSMEs.
- Creating More and Better Jobs
- Increase labor force participation (from 56.4% to above 65%).
- Boost female workforce participation (from 35.6% to 50% by 2047).
- Develop labor-intensive sectors like manufacturing, hospitality, and agro-processing.
- Promoting Structural Transformation
- Reduce agriculture’s employment share from 45% to enhance productivity.
- Encourage sectoral shifts to manufacturing and services.
- Enhance infrastructure, technology adoption, and streamline labor laws.
- Enabling States to Grow Together
- Implement targeted policies based on state-specific development levels.
- Support lagging states through incentive-driven federal programs.
- Improve public expenditure efficiency in low-income states.
Conclusion
India’s past achievements provide a strong foundation for its high-income aspirations.
A focused and aggressive reform agenda is essential to sustain rapid growth.
By deepening investment, labor participation, structural transformation, and state-led development, India can achieve its ambitious target by 2047.
The journey ahead is challenging but possible with the right policy mix and commitment.
As of 2023, India’s Gross Domestic Product (GDP) stands at approximately $3.57 trillion USD.
The full-year GDP growth for the fiscal year 2024-25 is projected at 6.5%.
At 6.3% growth it can grow up to USD 11005 IN 2047
AT 7.8% IT WILL BE USD 15010 IN 24
