World Bank Projects India Could Take 75 Years to Achieve a Quarter of US Per Capita Income

August 5 :
If present economic trends continue, the latest World Bank analysis estimates that it will take nearly 75 years for India to reach a quarter of the United States' per capita income. "World Development Report 2024: The Middle Income Trap" detailed the obstacles that more than a hundred countries, India included, will have to overcome if they want to join the ranks of the high-income nations in the next decades.

The report highlighted the fact that nations frequently fall into a "trap" when their GDP per capita hits about 10% of the US level, which is now estimated at $8,000. They are considered to be in the "middle-income" bracket according to their income. Only 34 economies in the middle income bracket have made it to the high income bracket since 1990, according to the analysis. According to the research, almost a third of these nations gained something from either finding oil or joining the European Union.

There were 108 middle-income nations as of the end of 2023, with GDP per capita ranging from $1,136 to $13,845. There is extreme poverty among two-thirds of the world's population, which is concentrated in these seventy-five countries. Among such nations was India.
An allusion to Prime Minister Narendra Modi's goal of making India a developed economy by the time the country celebrates its centennial of independence in 2047 was made by the organization. Although Modi has often stated this goal, the analysis indicated that it would be quite an accomplishment to accomplish such a change in 50 years, as South Korea managed in 25.

To achieve its 2047 goal, India will require substantial reforms to increase employment, according to Franziska Ohnsorge, the World Bank's Chief Economist for South Asia, who made this point in April. Those difficult times are not far off, according to World Bank Group Chief Economist Indermit Gill. "The road ahead has even stiffer challenges than those seen in the past: rapidly aging populations and burgeoning debt, fierce geopolitical and trade frictions, and the growing difficulty of speeding up economic progress without fouling the environment," said the president.

The strategies that many middle-income countries continue to use, he said, are "like driving a car just in first gear and trying to make it go faster." "Reasonably prosperous societies by the middle of this century" will remain elusive for the majority of nations, according to Gill, unless they update their approaches. To break out of the middle-income trap, the research recommended a trifecta of investment, importing foreign technology, and innovation.