India Needs Accelerated Reforms to Achieve High-Income Status by 2047: World Bank Report

New Delhi- India must implement sweeping reforms to achieve an average annual growth rate of 7.8% and transition into a high-income economy by 2047, according to a World Bank report released on Friday. The report, titled “Becoming a High-Income Economy in a Generation,” emphasizes the need for reforms in the financial sector, land, and labor markets to sustain long-term economic growth.

The report acknowledges India’s impressive economic trajectory, averaging 6.3% growth between 2000 and 2024. However, it warns that a “business-as-usual” approach will not be sufficient for India to achieve its ambitious 2047 goal. The country’s gross national income (GNI) per capita would need to increase nearly eightfold from current levels.

Key Reform Areas Identified

The World Bank outlines four critical areas requiring policy action:

1. Increasing Investments – Strengthening financial regulations, easing access to formal credit for MSMEs, and simplifying FDI policies.
2. Promoting Structural Transformation – Expanding industrial and services sectors while improving agricultural productivity.
3. Job Creation – Investing in labor-intensive sectors such as agro-processing, manufacturing, and the care economy.
4. Enhancing Human Capital Development – Improving education, health, and skill development to maximize India’s demographic dividend.

The report also recommends strengthening infrastructure, streamlining labor regulations, and reducing compliance burdens to enhance productivity and competitiveness. It suggests targeted federal incentives to help low-income states improve governance and public spending efficiency.

Global Lessons and India’s Growth Potential

World Bank India Country Director Auguste Tano Kouame cited examples from Chile, Korea, and Poland, noting their successful transition from middle-income to high-income economies through deeper integration into global markets.

Since 2000, India’s economy has grown nearly fourfold, with its share in the global economy doubling from 1.6% to 3.4% by 2023, making it the world’s fifth-largest economy. The report highlights India’s remarkable progress in reducing poverty, expanding infrastructure, and bolstering macroeconomic stability.

To sustain high growth over the next two decades, the report calls for continued digitization, urban development, and infrastructure investment. The World Bank warns that without accelerated reforms, India risks missing its goal of becoming a high-income economy by 2047.