Can India become rich before it grows old?

No

(as of April 19, 2025)

India is unlikely to become rich before it grows old because the required nominal annual growth rate of 18.0% to reach the rich country threshold of $13,000 nominal GNI per capita within 10 years far exceeds the projected actual nominal growth rate of about 7.0% per year. Similarly, the required PPP growth rate of 5.9% slightly surpasses the projected 5.0% growth rate, indicating a persistent shortfall in growth momentum needed to achieve "rich" status before the demographic peak in 2035.

What Is Going Wrong

  1. India's GDP growth slowed to an estimated 6.4% in fiscal year 2024–25, nearly 2 percentage points lower than the previous year’s 8.2%, falling short of the 8%+ growth rate generally considered necessary to achieve developed country status by 2047.
  2. The unemployment rate stands at 4.2%, with youth unemployment at a high 15%, while 10 to 12 million young people enter the job market annually, indicating a significant shortfall in job creation relative to labor force growth.
  3. Manufacturing employs only 25% of the workforce, whereas agriculture still employs over 44%, reflecting low industrialization and insufficient shift to higher productivity sectors; manufacturing’s contribution to GDP remains around 16-17%, below the 25-30% typical of rapidly industrializing economies.
  4. Infrastructure investment and development remain inadequate, with persistent bottlenecks in land acquisition and labor market reforms that hinder large-scale manufacturing and export-oriented growth; specific infrastructure coverage metrics (e.g., road density, power availability) lag behind targets needed to support rapid industrial expansion.
  5. India’s labor productivity remains low, with per worker GDP significantly below global middle-income country averages, and education and skill development systems have yet to close the gap needed to support a high-skill, high-productivity economy.

Key Individuals Responsible

Learn more about the methodology behind the ranking of key individuals.

  1. Narendra Modi (Prime Minister of India)
    As the head of government, Narendra Modi holds the highest scope of authority in shaping India's economic trajectory, directly influencing policy across all sectors affecting 5 billion people. Under his leadership, India’s GDP doubled from USD 1 trillion in 2015 to USD 3 trillion in 2025, achieving a 105% growth rate unmatched by any other major economy globally, reflecting decisive policy reforms and structural changes that have accelerated growth and improved ease of doing business. His administration’s focus on digital transformation, infrastructure, and global trade integration underpins India’s sustained 5-5% growth forecast by the IMF.

  2. Sanjay Malhotra (Governor, Reserve Bank of India)
    As the current RBI Governor, Sanjay Malhotra wields significant authority over monetary policy, banking regulation, and financial stability, directly addressing binding constraints such as inflation control, credit flow, and currency stability. His implementation power is critical in executing monetary policy that supports investment and consumption, impacting the entire economy. RBI’s recent policies under his tenure have maintained inflation within the target band and ensured liquidity to support growth, crucial for sustaining India’s projected 5% GDP growth in

  3. Nirmala Sitharaman (Union Minister of Finance and Corporate Affairs)
    Nirmala Sitharaman oversees fiscal policy, taxation, and government expenditure, controlling key economic levers that influence growth, employment, and investment. Her role directly impacts binding constraints like public investment and fiscal deficit management. Recent budgets have focused on infrastructure spending, tax reforms, and incentives for manufacturing and exports, which have contributed to India’s rapid economic expansion and improved global competitiveness.

  4. Amitabh Kant (CEO, NITI Aayog)
    As CEO of NITI Aayog, Amitabh Kant plays a pivotal role in strategic economic planning and policy coordination across ministries, targeting structural bottlenecks such as infrastructure deficits, skill development, and innovation ecosystems. His influence extends to implementing flagship programs that leverage India’s demographic dividend and promote sustainable growth. NITI Aayog’s initiatives under his leadership have been instrumental in driving reforms in agriculture, energy, and urban development, affecting millions and supporting India’s growth ambitions.

  5. Ashwini Vaishnaw (Union Minister for Railways, Communications and Electronics & IT)
    Ashwini Vaishnaw controls critical infrastructure sectors that underpin economic activity and digital transformation. His portfolio addresses binding constraints in logistics, connectivity, and technology adoption, which are essential for expanding manufacturing and services. Under his stewardship, India has accelerated railway modernization and expanded digital infrastructure, facilitating trade and commerce growth across urban and rural areas, thereby scaling impact on the economy’s productivity and inclusiveness.

Sources

  1. World Bank
  2. International Monetary Fund (IMF)
  3. United Nations – Population Division
  4. Ministry of Finance, Government of India
  5. NITI Aayog
  6. Reserve Bank of India (RBI)
  7. Ministry of Statistics and Programme Implementation (MoSPI)