The World Bank in a report on Friday said India’s economy needs to expand at an average growth rate of 7.8 per cent over the coming decades to become a high-income country.
“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,” it said.
The World Bank said that India is currently on track to become an upper-middle-income country by 2032, but it will need two more decades of “very high growth” to reach its target of becoming an advanced economy by 2047, its 100th anniversary of independence from Britain.
According to the World Bank, India’s gross national income per capita stood at USD 2,540 as of 2023. That number would have to grow to USD 20,000 by 2047 for the country to reach a high-income status.
Only a handful of countries have managed to make the transition from middle to high income in less than two decades. Many nations, including Brazil, Malaysia, Mexico, and South Africa, have languished in the middle-income trap for two decades, the lender said.
To reach its growth goals, the South Asian country will have to focus on capital investment, labour reforms, and boosting productivity, it added.
Over the next three decades, the dependency ratio — the number of children and elderly taken care of by the working-age population — is projected to increase from 45 per cent in 2032 to 49 per cent in 2050, the report said.
The report added that India should urgently boost labour force participation and job creation.