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India's per capita income is expected to grow around 70 per cent to $4,000 by 2030 from $2,450 currently, helping it become a middle-income country with a GDP of $6 trillion, a report released on Sunday said.
According to the weekend report by Standard Chartered Bank, more than half of India's by 2030 will come in from household consumption. The country's per capita income rose from $460 in 2001 to $1,413 in 2011 and to $2,150 in 2021.
It assumes that India's nominal GDP growth rate will be 10 per cent per annum from now on.
"The biggest growth driver will be external trade which may nearly double to $2.1 trillion by 2030 from $1.2 trillion in 2023 when the GDP printed in at $3.5 trillion," said the report.
The second biggest growth driver will be household consumption, which is seen jumping to $3.4 trillion by 2030, which is as big as the current size of the country's GDP. Currently, its contribution is $2.1 trillion, around 57 per cent.
This comes just days after Prime Minister Narendra Modi said that he would ensure that the economy becomes $5 trillion during his next term in office, which will make it the third largest after the US and China. Currently, Japan is in the third slot, and Germany is at four.
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How are Indian states likely to perform on the GDP front?
The report said that nine states would grow to the upper middle-income country status with a per capita income of $4,000.
Last week, data released by the Ministry of Statistics and Programme Implementation (MoSPI) showed that Telangana has the highest per capita income of Rs 275,443 or $3,360. It is followed by Karnataka at Rs 265,623, Tamil Nadu at Rs 241,131, Kerala at Rs 230,601, and Andhra Pradesh at Rs 207,771.
The Standard Chartered report, however, said that Gujarat will lead the list by 2030. It will be followed by Maharashtra, Tamil Nadu, Karnataka, Haryana, Telangana and Andhra Pradesh.
Among these, Telangana, Delhi, Karnataka, Haryana, Gujarat and Andhra together account for 20 per cent of the national GDP today, and will have a per capita GDP of $6,000 by 2030.
On the other hand, Uttar Pradesh and Bihar, which together make up 25 per cent of the population, will have per capita income below $2,000 even in fiscal 2030, which will still be two times their 2020 levels.
Working population to drive the economy
The overriding growth enabler will continue to be the higher share of the working-age population. The share of the working age population in the country in 2020 was 64.2 per cent, which will rise to 64.8 per cent by 2030.
In 2040, it may dip marginally to 63.6 per cent and further to 61.1 per cent in 2050.
This will help the economy benefit from labour efficiency, capital deployment, and a continued increase in the working-age population. However, persistently negative growth in the employment rate is a drag on per capita real GDP growth.
The report also named consistent reform progress, macro stability, healthy financial sector, deleveraging of the corporate sector and public capex push as other growth enablers.
(With agency inputs)
