India aims for the third-largest economy by 2030; Surpassing Germany and Japan


By Daniel Asikpo Aug 02, 2023


According to Standard Chartered Bank, India's per capita income is set to grow by 70% resulting in $4,000 by 2030. 


Image of buildings in India


Prime Minister Narendra Modi has promised several times that the Indian economy will be placed in the top 3 during his next term in office and will reach $5 trillion


Indeed there has been a massive improvement in India's economy. From fiscal 2001 to fiscal 2021, per capita income has increased significantly, rising from $460 to $2,150. By fiscal 2023, it is projected to reach $2,450.


With half of this Gross Domestic Product (GDP) to be fuelled by household consumption, this growth targets to elevate India to a middle-income economy with a GDP of USD 6 trillion. 

The key identifier to drive this growth will be external trade which is expected to double, reaching $ 2.1 trillion by 2030 from $ 1.2 trillion in fiscal 2023. This is according to Standard Chartered Bank in a weekend report with assumptions of a 10 per cent nominal GDP growth annually from now on.


Household consumption is set to be the second major growth driver identified in the report. It is forecasted to surge to $3.4 trillion by fiscal 2030 which equals the current size of the entire GDP, up from $2.1 trillion in fiscal 2023. Currently, household consumption constitutes a significant 57 per cent of the country's GDP.


The report Foresight's increasing number to nine states growing to the upper middle-income country status with $ 4,000 in per capita income. Currently, the lead list is as follows; Telangana with Rs 2,75,443 in fiscal year 2023, followed closely by Karnataka with Rs 2,65,623, Tamil Nadu with Rs 2,41,131, Kerala with Rs 2,30,601, and Andhra Pradesh with Rs 2,07,771. Though Gujarat does not hit the current first five list, the state is expected to take the lead in per capita income by fiscal 2030, followed by Maharashtra, Tamil Nadu, Karnataka, Haryana, Telangana, and Andhra Pradesh.


Though larger states like Uttar Pradesh and Bihar, comprising 25 per cent of the country's population, are expected to have a per capita income below USD 2,000 even in fiscal 2030, it gives room to States like Telangana, Delhi, Karnataka, Haryana, Gujarat, and Andhra Pradesh which are projected to collectively contribute 20 per cent to the national GDP and achieve a per capita GDP of USD 6,000 by 2030.


With India's household consumption expenditure currently accounting for 57 per cent of its GDP according to the report, in case the household expenditure share declines by 1 per cent, the size of the consumer market would remain equivalent to the size of the entire economy at present.


There is a higher share of the working-age population in India which in view of this report will continue to play a significant role in soaring and sustaining economic growth. The share of the working-age population in the country in 2020 was 64.2 per cent, which will rise to 64.8 per cent, with an assumed decline to 63.6 per cent in 2040 and further down to 61.1 per cent in 2050. This helps the economy benefit from capital deployment labour efficiency.


The report identifies consistent reform progress, macro stability, a healthy financial sector, deleveraging of the corporate sector, and increased public capex as crucial growth enablers in other to avoid negative growth in employment rate which hinders per capita real Gross Domestic Product growth.



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