India’s aspiration to become a developed country has found expression in many government documents. The objective is to become Viksit Bharat by 2047 when India completes 100 years from independence. There are examples of several countries that have achieved such a transition.
Can India achieve this goal? The purpose of this article is to completely establish the quantitative dimensions of becoming a developed country. The critical question focuses on the growth rate required to achieve the goal.
This in turn depends on several factors, such as the definition of a developed country, population growth, exchange rate movements and the expected inflation rate during the period.
The goal
There is no universal reference point that defines a developed country. However, the per capita income threshold of world banks for the countries of high-income countries is established at $ 14,006 by 2024-25 is widely accepted as the threshold for a developed country as well. This threshold has increased from $ 9,646 in 1997-98, marking an annual increase of $ 176.33.
Extrapolating this trend, the objective level of income for 2047-48 could be around $ 18,414. The per capita income axis of India or 2022-23 is $ 2,381. This shows the challenge we have before us. Some have calculated the entry of the per capita target at a high level or $ 21,664. Obviously, a higher per capita income objective would require a higher growth rate.
A per capita income or $ 18,414 would mean an added GDP or $ 29.99 billion of billions assuming a population or 162.87 million rupees in 2047-48. To obtain the equivalent rupee of this, we need to project the RUPIA exchange rate. Indian rupee has lost its value in relation to the dollar over time. At the time of India’s independence, a dollar was equivalent to ₹ 4.75. It is located in ₹ 85 in recent months.
With a 2 percent increase in the value of the dollar against the rupee per year, it is projected that the exchange rate reaches ₹ 133.79 by 2047-48. With a change rate of ₹ 133.79 per dollar, the nominal GDP in 2047-48 will have to be ₹ 4,012 billion. To get to this, the nominal GDP of India would need to grow at an annual rate or 11.41 percent over the next 25 years (2023-24 to 2047-48).
Assuming 4 percent inflation, which is the objective established in the new monetary policy framework, the required real average growth rate is 7.41 percent. This is 1.3 percentage points higher than the average real or 6.1 percent registered rate from 2012-13 to 2023-24. This ambitious growth trajectory has significant challenges, in part, since growth rates will not be uniform over time. The growth rate will have to be higher in the initial years, and then decrease as the base increases.
Since what is required is an increase in nominal growth, one may think that prices are easily increasing. This is not correct; If the general price level continues to increase, this will lead to a depreciation of the currency that will even demand a high nominal growth. Modern inflation is implicit in all these calculations.
The economic survey suggests a growth rate of 8 percent at constant prices for approximately one decade or two, but does not have details of assumptions or calculations to support this figure.
If the nominal GDP of India grows by 10.89 percent (the average rate of 2012-13 to 2022-23), the per capita income of $ 18,411 will be achieved only in 2049-50. In an optimistic scenario with future technological advances and initiatives of the policies induced by government growth, if the nominal growth increases in the next 25 years by 1 percent to 11.89 percent (that is, the state of real achesive by), by), by),), percent), percent), percent), percent). percentage) percent) percent) percent) percent) percent) percent) percent) percent) percent) percentage percentage percentage percentage percentage percentage)) percent percent) percent))). 2046-47.
Regional dimension
India’s growth is unequal in all regions. Six states: Maharashtra, Tamil Nadu, Karnataka, Uttar Pradesh, Gujarat and Western Bengal, contribute more than 52 percent of the national GDP. In contrast, the 27 states and territories of the Union (UTS) represent only 48 percent. For example, Goa’s per capita income is higher times than Bihar.
The nominal growth rate required to achieve per capita income of $ 18,414 by several states is revealing. Among the main states, the required nominal growth rate is a low axis 8.71 percent for Tamil Nadu, 9.63 percent for Gujarat, 8.77 percent for Karnataka and 9.53 percent for Maharashtra. At the other end, the nominal growth rate of the application is like the high axis of 17.4 percent for Bihar and 14.56 percent to Uttar Pradesh.
If the states/UT continue to grow at their respective average rate from 2012-13 to 2022-23, 16 states/UTS will lose the objective 2047: Odisha will arrive in 2048-49, Himachal Pradesh in 2049-50, Uttarakhand in 2051, Rajasthan 2052-53, Punjab in 2053-54, Jammu and Kashmir and Kashmir and Kashmir Chhathis in Chhathis Antis in Chhattisga in Chhhattisa An 2054-55, Manipur in 2055-56, Puscherry in 2056-57, Uttar Pradesh in 2057-58, Jharkhand in 2062-63, Bihar in 2068-69 and Meghalia in 2069-70.
On the contrary, Sikkim will reach the target for 2032-33 and both Telangana and Karnataka for 2038-39. Chandigarh and Mizoram will arrive in 2039-40 and 2040-1 respectively. Gujarat, Haryana and Tamil Nadu will reach in 2041-42. Andhra Pradesh and Goa will achieve the goal in 2042-43, while the Andaman and Nicobar Islands in 2044-45 and Tripura and Kerala in 2045-46. Arunachal Pradesh and Maharashtra will arrive in 2046-47 and Madhya Pradesh in 2047-48.
All these numbers indicate that they will not be convergence or per capita income between the states only in 2047-48 unless extraordinary efforts are made to increase the growth rate of low per capita income states. However, by 2057-58, all states, except Jharkhand, Bihar and Meghalaya, will have the capita income of a developed country.
Development strategy
While quantitative dimensions provide the distance to the trip, achieve the goal of Viksit Bharat will defend in numerous dynamic factors. Increase the investment rate in two percentage points to support greater growth, absorb new technologies to remain competitive, focusing on relatively more intensive work sectors to provide employment and expand social infrastructure should be formed or educate to obtain education and education and education development.
The vision of Viksit Bharat is not just a statistical objective: it must be a transformative trip that requests the collective effort of the government and society.
Rangerojan is former president, Economic Advisory Council of Prime Minister, former governor of RBI and president of Madras School of Economics; And Shanmugam is the former director of Madras School of Economics
Posted on April 22, 2025