India to become upper-middle income country in four years: SBI report

India is set to touch $4,000 per capita in another four years to transform into an upper middle income country in 2030, said a report by SBI Research. This estimation shows how swiftly this change has come despite the country taking 60 years to transition from a low-income country to lower-middle income in 2007. 

Once India achieves this it would join the ranks of countries like China and Indonesia. 

The report stated that India’s per capita gross national income (GNI) increased from $90 in 1962 to $910 in 2007, a CAGR of 5.3 per cent. India also achieved $1 trillion GDP in 60 years. 

The report added that India’s growth journey in the last decade shows that the country’s percentile rank in the cross-country distribution of average real GDP has increased from the 92nd percentile to the 95th percentile. 

If we consider the current per capita GNI threshold for a high-income country of $13,936 to be reached by 2047, then India’s per capita GNI has to grow at a CAGR of 7.5 per cent. This seems achievable since India’s GNI has grown at a CAGR of 8.3 per cent during the last 23 years.

Nevertheless, the threshold for a high-income country will also get changed by then. “If the threshold for a high income country gets changed to $18,000 then India’s per capita GNI needs to grow by a higher rate, CAGR of around 8.9 per cent in the next 23 years for it to become the high-income country by 2047,” it said.