India needs 7.8% average annual growth to become a high-income country by 2047: World Bank

India will need its economy to grow at an average annual rate of 7.8 per cent to become a high-income country by 2047. According to a report by the World Bank on Friday, February 28, India would require reforms in the financial sector, land, and labour market to achieve this goal. The World Bank said in its India Country Memorandum titled ‘Becoming a High-Income Economy in a Generation’ that India's growth averaged 6.3 per cent between 2000 and 2024.

The World Bank noted that India's past achievements provide the foundation for its future goals. 'Reaching the target of becoming a high-income economy by 2047 will not be possible in a business-as-usual scenario," said the Bank.

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For India to become a high-income economy by 2047, its GNI (gross national income) per capita would have to increase by nearly eight times over the current levels; growth would have to accelerate further and to remain high over the next two decades, a feat that few countries have achieved.

How can India become a high-income nation?

"To meet this target, given the less conducive external environment, India would need to not only maintain ongoing initiatives but, in fact, expand and intensify reforms," said the report. India has introduced structural reforms to transform it into a global manufacturing hub, boost infrastructure, improve human capital, and leverage digitization while bolstering macro stability.

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"To reach high income by 2047, India's growth rate needs to average 7.8 per cent, in real terms, over the coming decades... Only an 'accelerated reforms' package would put India on track to become high-income by 2047," said the report.

The Bank's India country director, Auguste Tano Kouame, said lessons from countries like Chile, Korea, and Poland show that they made the transition from middle to high-income countries by deepening their integration into the global economy. The report also said that over the past decades, India has developed at a scale and pace that few would have thought possible.

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In real terms, the economy has grown nearly fourfold from 2000 to today, and GDP per capita has almost tripled. Because India grew faster than the rest of the world, its share in the global economy doubled from 1.6 per cent in 2000 to 3.4 per cent in 2023, making it the fifth-largest economy.