India needs to grow by 7.8 pc to reach high-income status by 2047, a possible target: World Bank
A new World Bank report on Friday said that India needs to grow by 7.8 per cent on average over the next 22 years to achieve the country’s aspirations of reaching high-income status by 2047 -- a target that is possible to achieve.
The new 'India Country Economic Memorandum' titled ‘Becoming a High-Income Economy in a Generation,’ finds that this target is possible.
Recognising India’s fast pace of growth averaging 6.3 per cent between 2000 and 2024, the WB report noted that India’s past achievements provide the foundation for its future ambitions. Getting there however would require reforms and their implementation to be as ambitious as the target itself.
“Lessons from countries like Chile, Korea and Poland show how they have successfully made the transition from middle- to high-income countries by deepening their integration into the global economy,” said Auguste Tano Kouame, World Bank Country Director .
“India can chart its own path by stepping up the pace of reforms and building on its past achievements,” Kouame added.
The report evaluates three scenarios for India’s growth trajectory over the next 22 years.
The scenario which enables India to reach high-income status in a generation, requires India to achieving faster and inclusive growth across states; increasing total investment from current 33.5 per cent of GDP to 40 per cent (both in real terms) by 2035; increasing overall labour force participation from 56.4 per cent to above 65 per cent; and accelerating overall productivity growth.
“India can take advantage of its demographic dividend by investing in human capital, creating enabling conditions for more and better jobs and raising female labour force participation rates from 35.6 percent to 50 percent by 2047,” said Emilia Skrok and Rangeet Ghosh, co-authors of the report .
In the past three fiscal years, India has accelerated its average growth rate to 7.2 per cent.
In order to maintain this acceleration and attain an average growth rate of 7.8 per cent (in real terms) over the next two decades, the Country Economic Memorandum recommends four critical areas for policy action -- increasing investment, fostering an environment to create more and better jobs, promoting structural transformation, trade participation and technology adoption, enabling states to grow faster and together.
