New Delhi: India is set to touch $4,000 per capita income in another four years in 2030 to transition to an upper middle income country and join China and Indonesia at current classification, an SBI Research report said on Monday.
India took 60 years since independence to reach $1 trillion and achieved achieved $2 trillion in another seven years in 2014.
The country achieved $3 trillion in another seven years in 2021 and $4 trillion in another four years in 2025.
“India is likely to achieve $5 trillion in another two years. India achieved $1,000 per capita income in 62 years since independence in 2009. It achieved $2,000 per capita in another 10 years in 2019 and $3,000 per capita income in another seven years in 2026,” said Dr Soumya Kanti Ghosh, Group Chief Economic Advisor, State Bank of India.
The growth journey in the last decade shows that India’s percentile rank in the cross-country distribution of average real GDP growth has increased from the 92nd percentile over a 25-year horizon to the 95th percentile, implying a rightward shift in its relative position that places India deeper into the upper tail of the global growth distribution.
“If we consider the current per capita GNI (gross national income) threshold for high income country of $13,936 to be reached by 2047 (as per Viksit Bharat vision), India’s per capita GNI has to grow by a CAGR of 7.5 per cent. This seems achievable as India’s per capita GNI has grown by a CAGR of 8.3 per cent during the last 23 years (2001-2024),” Ghosh explained.
However, the threshold level for high income country will also get changed by then. If the threshold for high income country gets changed to $18,000, then India’s per capita GNI needs to grow by a higher rate, CAGR of around 8.9 per cent in the next 23 years for it to become the high-income country by 2047.
The report mentioned that assuming 0.6 per cent average population growth and average deflator of China, Japan, the UK, the US and Euro area of around 2 per cent (average between 1992-2024), this translates into growth of nominal GDP in dollar terms of around 11.5 per cent for the next 23 years.
“India should continue its reform agenda so that we can get higher incremental growth required to reach the high-income bracket,” the report said.
Clearly, India can and will transition to the upper middle-income country, which has the threshold per capita GNI of around $4,500.
Growth of Nominal GDP in dollar terms required to achieve this is around 11.5 per cent which is achievable as this growth has been around 11 per cent before the pandemic (FY04-FY20) and around 10 per cent during FY04-FY25, it added.
(IANS)
