India May Need 75 Years to Achieve 25% of US Per Capita Income: World Bank

India faces significant challenges in its pursuit of becoming a high-income country in the coming decades, according to a report by the World Bank. The report highlights that over 100 countries, including India, are confronted with hurdles in achieving high-income status. It predicts that New Delhi may take approximately 75 years to reach a quarter of the income per capita of the United States. Likewise, China is projected to take over 10 years to reach the same milestone, while Indonesia may require almost 70 years.

The World Development Report 2024: The Middle Income Trap emphasizes that as countries become wealthier, they often encounter a “trap” when their annual GDP per person reaches around 10% of that of the United States, which is currently about $8,000. This range falls in the classification of middle-income countries, with 108 nations falling into this category by the end of 2023. These middle-income countries are home to 75% of the global population and two-thirds of people living in extreme poverty. The report cautions that the path ahead presents even greater challenges, such as aging populations, rising debt, geopolitical and trade tensions, and the difficulty of achieving economic progress while preserving the environment.

Indermit Gill, Chief Economist of the World Bank Group, asserts that if developing countries continue with their existing strategies, they may struggle to create prosperous societies by the middle of this century. The report suggests a strategy for countries to attain high-income status, emphasizing the importance of adopting a sequenced and increasingly sophisticated mix of policies based on their stage of development. It also notes that since 1990, only 34 middle-income economies have successfully transitioned to high-income status, with a significant portion benefiting from integration into the European Union or the discovery of untapped oil resources.