A World Bank report released today emphasizes the need for India to implement accelerated reforms to achieve high-income status by 2047. The report, titled "Becoming a High-Income Economy in a Generation," suggests that India must maintain an average growth rate of 7.8 percent over the next 22 years to meet this goal.
The World Bank Country Director, Auguste Tano Kouamé, stated, "Lessons from countries like Chile, Korea and Poland show how they have successfully made the transition from middle- to high-income countries by deepening their integration into the global economy. India can chart its own path by stepping up the pace of reforms and building on its past achievements."
The report outlines three scenarios for India's economic growth over the next two decades. To reach high-income status, India needs faster and inclusive growth across states, increase total investment from 33.5 percent of GDP to 40 percent by 2035, raise labor force participation above 65 percent, and accelerate productivity growth.
Emilia Skrok and Rangeet Ghosh, co-authors of the report, noted that "India can take advantage of its demographic dividend by investing in human capital, creating enabling conditions for more and better jobs and raising female labor force participation rates from 35.6 percent to 50 percent by 2047."
Over the past three fiscal years, India's average growth rate has increased to 7.2 percent. To sustain this momentum and achieve a higher target rate of 7.8 percent in real terms over two decades, the memorandum recommends focusing on four critical policy areas:
1. Increasing investment: The report highlights strengthening financial sector regulations and simplifying foreign direct investment policies as essential steps.
2. Creating more jobs: It advises incentivizing private sector investments in job-rich sectors such as agro-processing manufacturing and hospitality.
3. Promoting structural transformation: Allocating resources toward productive sectors like manufacturing is necessary for raising productivity.
4. Enabling state-level growth: A differentiated policy approach should be adopted where less developed states focus on fundamental growth aspects while developed states advance further reforms.
By addressing these areas through targeted strategies at both national and state levels along with federal support programs like Urban Challenge Fund—aimed at improving performance among lagging districts—India could potentially realize its ambitions within one generation.