'India set to enter lower-mid income ranks'

With the economy growing at over 9 per cent for two years in a row, India is certain to break into the league of middle-income countries soon.

The finance ministry's chief economic advisor Ashok Lahiri said at present economic growth rates, India would break into the list of lower middle-income countries in the next 3-4 years.

However, according to World Bank estimates, it might happen next year, three years ahead of the earlier projection of 2011.

"India will probably move into the lower middle-income country classification of per capita income by 2008," Dipak Dasgupta, lead economist for World Bank in India, said.

According to the advance estimates of national income for 2006-07, India's per capita income at market prices stands at Rs 27,614 or $626.

The World Bank classifies its 184-member economies according to their 2005 gross per capita national income into four groups: Low income countries with per capita income of $875 or less, lower middle-income countries with per capita income between $876 and $3,465, upper income countries between $3,466 and $10,725 and high income countries with per capita income of $10,726 or more.

The World Bank classifications will remain in effect till July this year.

The difference between Dasgupta's projection and Lahiri's view lies in the way the World Bank calculates per capita income. While the figure of $626 is based on constant 1999-2000 prices, the bank uses current year data plus that of two preceding years and adjusts it for inflation and 20 other items.

Accordingly, the per capita income of the country stood at $720 for calendar year 2005.