New Delhi, Feb 28: A World Bank report released on Friday indicates that India must maintain an average growth rate of 7.8 percent to attain high-income status by the year 2047.
To realize this aspiration, significant reforms in the financial sector, as well as in land and labor markets, are necessary, as highlighted in the World Bank’s India Country Memorandum entitled ‘Becoming a High-Income Economy in a Generation’.
Acknowledging India’s rapid growth rate of approximately 6.3 percent from 2000 to 2024, the report emphasizes that past accomplishments lay the groundwork for future goals.
“However, achieving the ambitious target of becoming a high-income economy by 2047 isn’t feasible under a business-as-usual framework… For India to elevate its GNI (gross national income) per capita nearly eightfold from current levels by 2047, a significant acceleration of growth sustained over the next two decades is required, a challenge few countries have successfully navigated.
“To reach this objective, particularly in a less favorable external environment, India must not only sustain existing initiatives but also expand and intensify reforms,” the World Bank report stated.
In recent years, India has implemented various structural reforms aimed at transforming the nation into a global manufacturing powerhouse, enhancing infrastructure, improving human capital, and harnessing digital technologies, all while reinforcing macroeconomic stability.
“To achieve high-income status by 2047, India’s growth rate must average 7.8 percent in real terms over the coming decades… An ‘accelerated reforms’ package is essential to put India on the path towards becoming high-income by 2047,” the report asserted.
Auguste Tano Kouame, World Bank India country director, pointed out that insights from nations like Chile, Korea, and Poland illustrate how they have successfully transitioned from middle to high-income economies by deepening their integration into the global marketplace.
The report noted that in recent decades, India has progressed at a scale and speed many deemed improbable.
From 2000 to the present, India’s economy has grown nearly fourfold in real terms, with GDP per capita nearly tripling. India’s global economic share has surged from 1.6 percent in 2000 to 3.4 percent in 2023, making it the world’s fifth-largest economy.
“This inspiring development narrative also includes a significant reduction in extreme poverty and substantial improvements in service delivery and essential infrastructure. Building on these successes, India aspires to be a high-income nation by 2047,” the report concluded.
Kouame mentioned that India can carve out its unique path by accelerating reforms and leveraging its past successes.
The report assesses three potential growth trajectories for India over the next 22 years.
“India can capitalize on its demographic advantages by investing in human capital, fostering conditions for greater employment opportunities, and increasing female labor force participation from 35.6 percent to 50 percent by 2047,” stated report co-authors Emilia Skrok and Rangeet Ghosh.
The report indicated that over the last three fiscal years, India has ramped up its average growth rate to 7.2 percent.
To sustain this momentum and achieve an average growth rate of 7.8 percent (in real terms) over the next two decades, the Country Economic Memorandum outlines four key policy action areas, including boosting investment, promoting structural transformation, and generating more jobs.
The Country Economic Memorandum serves as a flagship analytical document examining a country’s economy, prepared by the World Bank worldwide.
The report reviews India’s economic and social developments from the past two decades, highlights current challenges, and suggests necessary reforms to realize sustainable and inclusive long-term growth as the country seeks to elevate its status to a high-income economy by 2047. (Agencies)
