As India climbs global ranks, focus shifts to per capita income

New Delhi, June 21: Over the past decade, India has climbed the global GDP rankings, surpassing several major economies. Yet, despite this impressive growth, the country continues to lag in terms of per capita income—a key indicator of individual prosperity.

A recent report by Llama Research highlights the need for India's next phase of growth to directly benefit its citizens. The report emphasizes that while India ranks lowest in per capita income among the world’s top 10 economies, this should not be viewed as a weakness. Instead, it represents "a window of compounding potential" for long-term inclusive growth.

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India’s strengths—including a digitally connected and tech-savvy population, stable macroeconomic policies, and opportunities for capital formation—position the country favorably for this transformation. Additionally, a growing middle class, expanding manufacturing sector, and increasing formalisation of the economy add momentum to its development journey.

“India is not just moving up the ranks; it’s laying the groundwork to lead from the grassroots,” Llama Research noted in its report titled India's Growth: Journey from Size to Strength.

To achieve the government’s vision of Viksit Bharat—a fully developed nation by 2047—the country will need to maintain an average growth rate of around 8% per year in real terms for the next decade or two, according to the Economic Survey for 2024–25 presented on January 31.

Currently, India stands as the fifth-largest economy in the world and continues to be one of the fastest-growing among major nations. The International Monetary Fund (IMF) projects that India will surpass Japan this fiscal year to become the fourth-largest economy globally.

India’s growth trajectory remains robust: the economy expanded by 6.5% in real terms during the 2024–25 financial year. This follows strong performances in previous years, with GDP growth recorded at 9.2% in 2023–24, 8.7% in 2021–22, and 7.2% in 2022–23, according to official data.

(With agency inputs)