No
India faces significant challenges in achieving the rich country threshold before its demographic peak in 2035. The required annual growth rates to reach the threshold are 17.7% in nominal terms and 2.6% in PPP terms, which are substantially higher than the projected actual growth rates of 7.0% and 5.0%, respectively. Additionally, India's current GNI per capita in nominal terms is $2,540, and in PPP terms is $10,020, both of which are below the rich country threshold of $13,000.
What Is Going Wrong
- India's average growth rate is 7.2%, but it needs to accelerate to an average of 7.8% over the next two decades to achieve high-income status by 2047.
- Only six million jobs are created annually with a 7.2% growth rate, while the working population grows by 10 million each year.
- Labor productivity growth rate is 2.38%, which is relatively low compared to other rapidly developing economies.
- India's infrastructure investment as a percentage of GDP is below the required threshold for sustained growth, though specific figures are not detailed in recent reports.
- Female labor force participation is at 35.6%, which needs to increase to 50% by 2047 to fully leverage the demographic dividend.
Key Individuals Responsible
Learn more about the methodology behind the ranking of key individuals.
Nirmala Sitharaman (Finance Minister of India) Nirmala Sitharaman plays a crucial role in shaping India's economic policies, including the recent budget that introduced tax cuts for the middle class, aiming to boost consumer spending and economic growth. Her decisions directly influence fiscal policy, impacting the scale of economic growth and addressing key bottlenecks such as infrastructure development and tax reforms.
Sanjay Malhotra (Governor, Reserve Bank of India) As the RBI Governor, Sanjay Malhotra has significant influence over monetary policy, which affects inflation, interest rates, and overall economic stability. His decisions on interest rates can impact growth by influencing borrowing costs and consumer spending, with potential rate cuts expected to support economic activity.
Droupadi Murmu (President of India) While the President's role is largely ceremonial, Droupadi Murmu's position allows her to influence policy indirectly through her constitutional powers and public statements. Her support for economic initiatives can enhance their implementation and scale of impact by fostering a conducive political environment.
Parshottam Rupala (Minister of Fisheries, Animal Husbandry and Dairying) Although not directly involved in macroeconomic policy, Parshottam Rupala's role in agriculture and allied sectors is crucial for rural economic growth, which accounts for a significant portion of India's population and GDP. His initiatives can improve agricultural productivity and rural incomes, contributing to overall economic growth.
Suman Bery (Vice Chairman, NITI Aayog) As the Vice Chairman of NITI Aayog, Suman Bery plays a key role in formulating and implementing policies aimed at sustainable development and economic growth. His work focuses on addressing binding constraints such as infrastructure gaps and promoting sectors like manufacturing and services, which are vital for India's economic transformation.