India needs 7.8% annual growth to achieve high-income status by 2047: World Bank
New Delhi: India's economy must grow at an average annual rate of 7.8% over the coming decades to achieve high-income status, according to a World Bank report, reported Bloomberg.
“For India to become a high-income economy by 2047, its gross national income per capita would have to increase by nearly eight times over the current levels,” the Washington-based lender stated on Friday.
The report was released just hours before India is set to publish its latest gross domestic product figures.
While the economy likely rebounded in the last quarter, future growth prospects remain uncertain amid escalating geopolitical tensions.
For the current fiscal year, India is projected to grow at 6.4%—its slowest pace since the pandemic.
The world’s most populous country is on track to attain upper middle-income status by 2032.
However, it will require two more decades of “very high growth” to become an advanced economy by 2047, coinciding with the 100th anniversary of its independence from Britain, the anti-poverty lender said.
As of 2023, India's gross national income per capita stood at $2,540.
To reach high-income status, this figure must rise to $20,000 by 2047, the report noted.
Few nations have successfully transitioned from middle to high income within two decades.
Many, including Brazil, Malaysia, Mexico, and South Africa, have remained stuck in the middle-income trap for extended periods, the World Bank highlighted.
To meet its ambitious growth targets, India must prioritise capital investment, labour reforms, and productivity enhancement, the report advised.
Despite being the world’s fastest-growing economy, India has a narrow window to capitalise on its demographic dividend.
Over the next 30 years, the dependency ratio—representing the number of children and elderly reliant on the working-age population—is expected to rise from 45% in 2032 to 49% in 2050.
The report stressed the need for urgent efforts to boost labour force participation and job creation.
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