India Poised to Join Upper-Middle-Income Group by 2030: SBI Report

India is on track to become an upper-middle-income country by 2030, according to a report from the State Bank of India (SBI). This evolution marks a significant change in the country’s economic landscape, positioning India alongside nations like China and Indonesia.

Projected Economic Growth

The SBI report states that India is likely to achieve a per capita income of $4,000 within the next four years. This ascent will reflect a broader transition within the country’s income profile.

Historical Context

• India transitioned from a low-income to a lower-middle-income economy in 2007.
• Per capita gross national income (GNI) grew from $90 in 1962 to $910 in 2007.

This growth represented a compound annual growth rate (CAGR) of 5.3%. The pace of economic growth has accelerated since then.

Milestones in Economic Growth

• India reached a $1 trillion economy six decades post-independence.
• It added another trillion in just seven years by 2014.
• Subsequent milestones include hitting the $3 trillion mark in 2021 and aiming for $5 trillion by 2025.

Per Capita Income Trends

India’s per capita income trends show substantial growth. It achieved $1,000 in 2009, doubled to $2,000 by 2019, and is projected to reach $3,000 by 2026. This trajectory suggests a robust economic future.

Global Economic Standing

Over the past decade, India’s relative performance in global growth has improved significantly. Its ranking in average real GDP growth has shifted from the 92nd to the 95th percentile over a 25-year period.

Future Economic Goals

Looking ahead, if India aims to meet the high-income GNI threshold of $13,936 by 2047, it will need to sustain a GNI CAGR of 7.5%. This goal aligns with India’s Viksit Bharat vision.

• The per capita GNI grew at a CAGR of 8.3% from 2001 to 2024.
• If high-income thresholds rise to approximately $18,000, a CAGR of 8.9% will be necessary.

Sustaining Economic Momentum

To meet these ambitious goals, India must continue implementing reforms aimed at achieving higher incremental growth. The transition to the upper-middle-income category, defined by a per capita GNI threshold of roughly $4,500, is within reach. This requires nominal GDP growth of about 11.5%, a rate previously achieved prior to the pandemic.

Global Classification Overview

The World Bank categorizes countries based on their per capita GNI into four groups: low-income, lower-middle-income, upper-middle-income, and high-income. Over time, countries are expected to progress into higher income brackets.

This data highlights the significant improvements in global income distribution over time, reinforcing the potential for further economic advancement in India.