India Business Journal - India needs to grow by 7.3% annually to become developed country by 2047

ECONOMY

India needs to grow by 7.3% annually to become developed country by 2047

IBJ Bureau
Mar 02, 2025

The 16th Finance Commission Chairman Arvind Panagariya on Saturday said that India’s aim of becoming a developed nation by 2047 is a “realisable ambition”, for which the country’s per capita income needs to grow at 7.3 per cent in dollar terms to $14,000 over the next 24 years.

India’s per capita income in 2023-24 dollar terms is about $2,570, which is very low compared to that in countries like South Korea, Taiwan, United States and other European nations.

Speaking at the 49th Civil Accounts Day, Mr Panagariya said that with the existing technology, coupled with reasonable capital accumulation and skill acquisition, India has enormous room for catching up with the per capita income of developed nations and meet World Bank’s definition of $14,005 per capita income annually.

Today, our per capita income in dollars is about $2,500. To get to $14,000 in 24 years or by 2047-48, what growth rate do I need for per capita income? My per capita income from 2023-24 onward has to grow annually at 7.3 per cent, Mr Panagariya said.

He further added that according to the estimates by the United Nations, population in India would grow by 0.6 per cent by 2050. This would mean that to achieve that 7.3 per cent growth in per capita income, India’s GDP will have to grow at 7.9 per cent during the next 24 years.