India may become an upper middle income economy by FY33-36: India Ratings and Research
STORIES, ANALYSES, EXPERT VIEWS
India could transition into an upper middle-income economy by fiscal years 2033 to 2036 under different scenarios and become a $ 15 trillion economy over fiscal 2043 to fiscal 2047, said a report by India Ratings and Research on Monday.
Listing out various scenarios, the agency said that to become a $5 trillion economy by FY30 with per capita income of $ 3,467, the economy would require a real GDP growth rate of 6.25%, GDP deflator growth 3.5% and INR/USD depreciation 3.25%. But to transform to a $5 trillion economy by FY2029 with capita income of $ 3,530, real GDP growth per annum would have to be faster at 8%.
India presently a lower-middle income country: In 2007, India moved to the lower-middle income country and since then has remained there. India’s per capita GDP stood at $ 2,390 in 2022. To become an upper-middle-income country, the per capita income would have to be in the range of $4,466- $13,845.
Growth rates required: According to the agency, to reach $30 trillion by FY2047, the Indian economy will have to grow at 9.7% per annum over FY24-FY47 in the current USD terms. It however, cautioned that in the past 50 years, there have been only two instances when the economy grew higher than 9.7% per annum in USD terms for a period of 10 years: 1973-1982 and 2003-2012.
However, irrespective of whether India attains the $ 30 trillion target by 2047 or not, India Ratings estimates of per capita income reaching $ 9,218 to $ 9,920 over FY43-FY47 means India would be much closer to the high-income country’s threshold of $ 13,846 per capita.
Crisil estimate: Recently, rating agency Crisil had recently said that India can attain upper middle-income status by 2031, with the economy expected to double to $7 trillion while projecting that the economy would grow by 6.8% in the next fiscal.
