India’s

Standard Chartered Bank predicts India's per capita income

Standard Chartered Bank predicted in a recent study that India's per capita income will rise by about 70% to US$4,000 by fiscal 2030, up from US$2,450 in fiscal 2023.

This rise is predicted to help the country attain middle-income status, with a GDP of US$6 trillion. Notably, home spending will account for more than half of this GDP. The analysis predicts India's per capita income and GDP will rise in the next years. Per capita income rose dramatically from fiscal 2001 to fiscal 2021, growing from US$460 to US$2,150. It is expected to reach US$2,450 by fiscal 2023.

According to Standard Chartered Bank's predictions, foreign trade would be the primary engine of growth, nearly doubling to US$2.1 trillion by 2030, up from US$1.2 trillion in fiscal 2023, when GDP was US$3.5 trillion. The analysis forecasts an exceptional jump in foreign trade based on a sustained ten% yearly growth rate in nominal GDP.

Household consumption is the report's second key growth driver. It is expected to rise from US$2.1 trillion in fiscal 2023 to US$3.4 trillion by fiscal 2030, equal to the present size of the total GDP. Currently, household spending accounts for 57% of the country's GDP.

Prime Minister Narendra Modi has stated his intention to guarantee that the GDP hits US$5 trillion in his next term if he wins elections and returns to power. If India reaches this milestone, it will be the world's third-largest economy, overtaking Japan and Germany.

The research also predicts that nine states will attain upper-middle-class status, with a per capita income of US$4,000. However, the names of these states have yet to be revealed.

Telangana now tops the league table in terms of per capita income with Rs 2,75,443 in the fiscal year 2023, followed by Karnataka with Rs 2,65,623, Tamil Nadu with Rs 2,42,131, Kerala with Rs 2,31,601, and Andhra Pradesh with Rs 2,08,771. According to the survey, Gujarat is predicted to lead in per capita income by fiscal 2030, followed by Tamil Nadu, Maharashtra, Haryana, Karnataka, Telangana, and Andhra Pradesh.

According to the research, India's household consumption spending presently accounts for 57% of its GDP. Even if the percentage of household expenditure falls by 1%, the consumer market’s size will remain equal to the size of the total economy.

Furthermore, the research stated that the increased proportion of the working-age population will continue to play an important role in economic growth. The proportion of the working-age population in the country is expected to rise from 64.2% in 2020 to 64.8% by 2040 before falling to 61.1% in 2050. This demographic advantage is predicted to boost labor productivity, capital deployment, and long-term growth.

However, the research warns that continued low employment growth might stifle per capita real GDP growth. The paper sees persistent reform progress, macro stability, a sound banking sector, corporate deleveraging, and enhanced public capex as critical growth enablers to support robust and sustained economic growth.