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, according to a World Bank report.

“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,” the Washington-based organization said on Friday. 

The report comes just hours before India is set to release gross domestic product figures for the last quarter. While the economy likely rebounded during the period, its growth prospects remain uncertain in coming months given rising geopolitical tensions. For the current fiscal year, the nation is expected to expand at 6.4 per cent — the weakest pace since the pandemic.

The world’s most populous nation 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 — the anti-poverty lender said. 

India’s gross national income per capita stood at $2,540 as of 2023, according to the World Bank. That number would have to grow to $20,000 by 2047 for the country to reach high-income status, it added.

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, labor reforms and boosting productivity, it added. 

The world’s fastest-growing economy has a limited window to leverage its demographic dividend. 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, adding that India should urgently boost labor force participation and job creation.

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