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Indian per capita income to grow sevenfold by 2047
State Bank of India report says burgeoning middle class to push income boundaries
Photo for illustrative purposes only. — File photo
The per capita income of Indians is expected to increase seven-fold, from Rs200,000 ($2,500)in the current financial year FY23 to Rs1.49 million ($12,400) in FY47, coinciding with 100 years of the country’s independence.
India, currently the fifth largest economy in the world, is predicted to become the third largest global economic power before 20230 after the US and China, overtaking Germany and Japan. The nation of 1.42 billion people is estimated to grow at 6.7 per cent per year from FY24 to FY31. Its GDP, estimated at $3.7 trillion by the end of 2023, will catapult to $6.7 trillion in FY31. A report by S&P estimated its per capita GDP will increase to about $4,500 from the current $2,450 by FY31.
However, the South Asian powerhouse, which is also the fastest-growing major economy and most populous nation, is ranked 139th by the International Monetary Fund in terms of nominal per capita GDP.
Prime Minister Narendra Modi said in a LinkedIn post on Friday citing a study by State Bank of India Research that India is making remarkable progress on achieving equitable and collective prosperity, with Income Tax returns data showing a leap in mean income over the last nine years.
Taking to X, PM Modi also wrote: “India’s economy shines as a beacon of hope in these challenging times. With robust growth and resilient spirit, the future looks promising. Let us keep this momentum and ensure prosperity for 140 crore (1.4 billion) Indians.”
Soumya Kanti Ghosh, group chief economic adviser, SBI, said the weighted mean income was Rs440,000 in FY14 (assessment year). That rose to Rs1.3 million in FY23. The buoyancy in the number of tax-filers has contributed to the upward push.
According to Ghosh, the middle class is on the rise. It is more forward-looking than what a lot of corresponding research has been able to capture. This class displays a state of mind filled with abundant hope.
The population of India is expected to increase to 1.6 billion in FY47 from 1.4 billion in FY23 and, correspondingly, the workforce is expected to increase to 725 million in FY47 from 530 million in FY23. This would mean increasing the workforce share in the population from 37.9 per cent in FY23 to 45 per cent in FY47.
The formalisation drive of nearly 70 million MSMEs promises to broad base the cohort suitably. About 25 per cent of ITR (income tax return) filers are expected to leave the lowest income strata by FY47 (against 13.6 per cent leaving the lowest income strata between AY12-AY23, the SBI report said.
The prime minister in his post also said that the SBI report shows that the smaller states, especially from the northeast, namely Manipur, Mizoram, and Nagaland, have exhibited “an admirable growth of over 20 per cent in ITR filings in the last 9 years.” “This shows that not only have incomes risen but so has compliance. And, this is a manifestation of the spirit of trust which the people have in our Government,” Modi said.
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