World Bank Report on India’s Path to Becoming a High-Income Economy by 2047

World Bank Report on India’s Path to Becoming a High-Income Economy by 2047

The World Bank's report highlights that India must achieve an average growth rate of 7.8% over the next 22 years to transition into a High-Income Country (HIC) by 2047. India officially became a Low Middle-Income Country (LMIC) in 2007-08 and is on track to become an Upper Middle-Income Country (UMIC) by 2032.

Key Challenges in Reaching HIC Status by 2047:

1. Slow Structural Transformation: Agriculture still employs 45% of the workforce (2023-24), while low-productivity sectors like traditional market services and construction make up nearly 30%. In comparison, manufacturing accounts for just 11% of total employment, and modern market services only 7%.

2. Declining Private Investment: Private investment, which saw a surge after the 1990s reforms, has since declined as a share of GDP, especially following the global financial crisis of 2008.

3. Underutilization of Demographic Dividend: From 2000-2019, the working-age population grew by 37.4%, but employment only rose by 15.7%. Over the same period, the labor force participation rate dropped from 58% to 49%, remaining low compared to other middle-income countries.

Key Strategies for Growth:

1. Boost Investment: Increase investment from 33.5% to 40% of GDP by 2035 through improved financial regulations, better access to credit for MSMEs, and streamlined Foreign Direct Investment (FDI) policies.

2. Create Jobs: Promote private investment in sectors that generate large numbers of jobs, such as agro-processing, manufacturing, transportation, and the care economy.

3. Balanced Regional Growth: Encourage less developed states to focus on foundational areas like health, education, and infrastructure, while more developed states can push for next-generation reforms.

Tags : UPSC 2025 current affairs preparation, UPSC current affairs January 2025, UPSC 2025 daily current affairs, Best sources for UPSC current affairs 2025, UPSC 2025 current affairs for prelims, UPSC 2025 current affairs for mains, Important current affairs for UPSC 2025, UPSC current affairs strategy 2025, UPSC 2025 current affairs notes, UPSC current affairs PDF 2025, Current affairs for UPSC 2025 preparation, UPSC 2025 current affairs online classes, UPSC current affairs quiz 2025, How to study current affairs for UPSC 2025, UPSC 2025 current affairs magazines, Current affairs for UPSC 2025 prelims and mains, Current affairs updates for UPSC 2025, UPSC 2025 current affairs analysis, Current affairs for UPSC 2025 PDF download, UPSC 2025 current affairs important topics,