India Could Require 75 Years to Achieve 25% of US Per Capita Income, According to World Bank

India faces significant challenges in achieving high-income status in the coming decades, according to a World Bank report. The report states that more than 100 countries, including India, are confronted with obstacles in reaching high-income status, with New Delhi projected to take around 75 years to achieve one-quarter of the income per capita of the United States.

Similarly, China is expected to take over 10 years to reach this benchmark, while Indonesia may require nearly 70 years. The report, titled the World Development Report 2024: The Middle Income Trap, highlights that as countries become wealthier, they often encounter a ‘trap’ when reaching around 10 per cent of annual US GDP per person.

This typically occurs within the middle-income range, with 108 countries classified as middle-income as of the end of 2023, collectively accounting for 75 per cent of the global population. These countries also house two out of every three people living in extreme poverty.

The report outlines that the challenges ahead for these countries are more formidable than those faced in the past, with factors such as aging populations, increasing debt, geopolitical and trade tensions, and the difficulty of advancing economic growth without detrimental environmental impacts. It also warns that if developing countries adhere to the conventional strategies, they may struggle to create prosperous societies by the middle of the century.

Indermit Gill, the Chief Economist of the World Bank Group and Senior Vice President for Development Economics, emphasized the pivotal role that middle-income countries play in the global economic landscape. The report proposes a strategic approach for countries to progress towards high-income status, emphasizing the need for a tailored and progressively sophisticated mix of policies, based on their respective stages of development.

Furthermore, the report notes that only 34 middle-income economies have transitioned to high-income status since 1990, with more than a third attributed to integration into the European Union or the discovery of oil.