World Bank: India needs 7.8 % growth to become Viksit Bharat by 2047
Report
5 min read
According to a World Bank report, India needs to grow at an average annual growth rate of 7.8 percent to achieve the target of a Viksit Bharat or a developed country by 2047. This was stated in the recently released World Bank report, “ The India Country Economic Memorandum, Becoming a High-Income Economy in a Generation,” released on 28 February 2025. According to the World Bank, India is a low-middle-income country.
Classification of Countries by World Bank
The World Bank classifies the economy based on Gross National Income (GNI) per capita. GNI is measured in United States dollars (USD) and is determined using conversion factors derived according to the World Bank Atlas method.
The classifications are updated each year on 1st July and are based on the GNI per capita of the previous year.
The World Bank classifies the countries into Low Income, Middle Income, and High Income. The Middle income is again subdivided into Lower -Middle Income and Upper -Middle Income.
|
Group |
GNI per capita (based on GNI per capita of 2023). All figures are in US dollars. |
|
Low Income |
1,145 or less |
|
Lower-Middle Income |
$1,146- $4,515 |
|
Upper -Middle Income |
$4,516 - $14,005 |
|
High Income |
More than $14,005. |
According to the World Bank, India is a low-middle-income country, while China is a high-middle-income economy..
The GDP per capita of India in 2023 was $2,480.
If India needs to achieve the status of Viksit Bharat or an upper-middle-income economy, then its per capita income needs to be $4,516 or more.
What does India need to do?
According to the World Bank report, India needs to focus more on domestic factors to achieve an average growth rate of 7.8 percent.
- India should also focus on increasing foreign trade and utilize the opportunity in the context of shifting global supply chains.
- The total investment rate in the economy shall be increased from the current 33.5 percent of GDP to 40 percent by 2035.
Increase in Labour Force Participation
- India needs to increase labour force participation from 56.4 percent to 65 percent by 2047.
- The women labour force participation shall increase from the current 35.6 percent to 50 percent by 2047.
Structural Transformation
- India needs to invest its economic resources in more productive sectors like manufacturing and service and move away from agriculture.
- Currently, around 45 percent of employment is generated through the agriculture sector.
- India should focus on building infrastructure, reforming the labour laws, and improve the ease of doing business
Reform in States
- In the less developed states, the focus shall be on improving health, education, and infrastructure.
- The relatively developed states shall focus on becoming part of the global value chains and focus on business-friendly reforms.
Strength of India
- According to the World Bank, certain favourable factors can help India achieve its goal.
- India’s macroeconomic foundations are strong, it has a favourable demographic dividend, a strong pro-reform momentum, a large market, and strategic and political opportunities.
