‘Becoming a High-Income Economy in a Generation' Report Released by World Bank | Current Affairs | Vision IAS
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‘Becoming a High-Income Economy in a Generation' Report Released by World Bank

Posted 01 Mar 2025

2 min read

An image showing India's Economic Growth over two decades.

The report recognizes that India needs to grow by 7.8% on average over the next 22 years to become  High-Income Country (HIC) by 2047. 

  • India became a Low Middle-Income Country (LMIC) in 2007-08 and is currently on track to become an Upper Middle-Income Country (UMIC) by 2032.

Key Challenges In Becoming HIC By 2047

  • Slow Structural Transformation: Agriculture still employs 45% of the workforce (2023-24) while traditional market services and construction (low productivity) together constitute nearly 30%. 
    • In contrast, the share of manufacturing in total employment was around 11% and modern market services accounted for only 7%. 
  • Declining Private Investment:  Private investment surged post-1990s reforms but it has fallen as a share of GDP, particularly since the global financial crisis in 2008. 
  • Underutilisation of Demographic Dividend: Over 2000-19, the working-age population increased by 37.4%, but employment increased by only 15.7%. 
    • During this period, the labor force participation rate fell from 58% to 49% remaining low by middle-income countries standards. 

Key Strategies for Growth

  • Boost Investment: Increase investment from 33.5% to 40% of GDP by 2035 through better financial regulations, easier MSME credit, and simplified FDI policies.
  • Create Jobs: Encourage private investment in job-rich sectors like agro-processing, manufacturing, transport, and care economy.
  • Balanced Regional Growth: Less developed states focus on basics (health, education, infrastructure), while developed states advance next-gen reforms.
  • Tags :
  • World Bank
  • Indian Economy
  • High-Income Country
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