Standard Chartered Bank recently predicted a significant jump in India’s per capita income, projecting a rise of nearly 70% by the fiscal year 2030, according to a research report. This substantial growth is expected to catapult the country into the status of a middle-income economy, bolstered by a Gross Domestic Product (GDP) amounting to $6 trillion.
India’s current per capita income stands at $2,450 in fiscal 2023, marking a substantial increase from $460 in fiscal 2001. The country’s trajectory in per capita income has demonstrated a robust trend of growth over the years, hinting towards a promising economic future.
The comprehensive report reveals that external trade is set to be a pivotal growth driver, with estimates pointing to a near-doubling of trade value to $2.1 trillion by 2030 from $1.2 trillion in fiscal 2023. These figures assume a consistent 10% annual growth in nominal GDP, pointing towards a significant increase in external trade.
Household consumption, which currently accounts for a hefty 57% of India’s GDP, is expected to leap to $3.4 trillion by fiscal 2030, roughly the size of the entire present GDP. If predictions hold, this will mark a considerable ascent from its $2.1 trillion figure in fiscal 2023.
Prime Minister Narendra Modi, vying for another term in office, has expressed his steadfast commitment to ensure the country’s economy reaches the $5 trillion mark. Attaining this significant milestone would push India into the third spot globally, surpassing established economic giants like Japan and Germany.
The report also projects the rise of nine states to upper-middle-income status, each with a per capita income of $4,000. Specific states have not been disclosed yet. At present, Telangana and Karnataka lead the pack in terms of per capita income.
Crucially, the report places emphasis on India’s demographic advantage. The share of the working-age population is projected to marginally increase to 64.8% by 2040 from 64.2% in 2020, though it’s expected to taper to 61.1% by 2050. This increase is believed to result in enhanced labour efficiency, optimised capital deployment, and sustained growth.
However, the report also highlights potential stumbling blocks to growth, cautioning about the detrimental impact of a negative employment growth rate on per capita real GDP growth. Consistent reform progress, macro stability, a healthy financial sector, corporate sector deleveraging, and increased public capex are identified as essential growth enablers to ensure robust and sustained economic growth.
This news is based on an article from businesstoday.in.