A new SBI Research report paints an optimistic picture for India’s economy, forecasting entry into the upper middle-income category by 2030 as per capita income nears $4,000. Currently home to nations like China and Indonesia, this group represents a significant upgrade for India.
India’s economic journey has been one of accelerating triumphs. From 60 years to build a $1 trillion economy after independence, the nation surged to $2 trillion in merely seven years by 2014. Milestones followed rapidly: $3 trillion in 2021 and $4 trillion projected for 2025.
‘Steady progress toward $5 trillion in the coming two years,’ stated Dr. Soumya Kanti Ghosh, Group Chief Economic Adviser at SBI. Per capita milestones include crossing $1,000 in 2009, $2,000 in 2019, and $3,000 expected by 2026.
India’s growth over the last decade has been superior to many counterparts worldwide, enhancing its global economic profile. For the ambitious 2047 ‘Developed India’ vision, per capita GNI needs a 7.5% CAGR. With a historical 8.3% over 23 years, it’s achievable—though a potential threshold hike to $18,000 would demand 8.9% growth.
Adjusting for demographics and inflation, nominal GDP growth at 11.5% annually is crucial. The report advocates continuous reforms to maintain high growth rates seen pre-COVID, such as 11.5%, ensuring upper middle-income status with its ~$4,500 per capita benchmark.