India is on a remarkable trajectory to achieve upper middle-income status by 2030, with per capita income projected to surpass $4,000. This milestone places the nation alongside economic powerhouses like China and Indonesia, according to a comprehensive report released by SBI Research on Monday.
The report underscores India’s accelerating economic momentum. Post-independence, it took nearly six decades to reach a $1 trillion economy. Yet, in a stunning leap, the country hit $2 trillion in just seven years by 2014. This pace quickened further, crossing $3 trillion in 2021 and eyeing $4 trillion by 2025.
Dr. Soumya Kanti Ghosh, SBI’s Group Chief Economic Adviser, highlighted that India is poised to become a $5 trillion economy within the next two years. He noted key per capita income benchmarks: $1,000 achieved in 2009 after 62 years of independence, $2,000 by 2019, and an expected $3,000 by 2026.
Over the past decade, India’s growth rate has outpaced many global peers, cementing its position as one of the world’s fastest-growing major economies. This surge has bolstered India’s global standing significantly.
Looking ahead to 2047, when India aims for ‘Developed India’ status, Dr. Ghosh emphasized the need for per capita GNI to grow at a compound annual growth rate (CAGR) of 7.5%. Remarkably, the last 23 years have seen an 8.3% CAGR, making the target feasible. However, if the high-income threshold rises from $13,936 to $18,000, the required growth jumps to 8.9% annually.
Factoring in population growth and inflation, India’s nominal GDP must expand at 11.5% yearly for the next 23 years in dollar terms. SBI Research stresses sustained economic reforms to sustain this momentum and propel India into the high-income bracket.
Achieving upper middle-income status, with a per capita threshold around $4,500, is entirely within reach. India has previously clocked 11.5% GDP growth, particularly in pre-pandemic years, proving its capability.