India At The Crossroads: From Lower Middle Income To Viksit Bharat By 2047

By Joydeep Sen & Dr Sumana Chaudhuri

As India stands tip toe of what the Prime Minister has termed Amrit Kaal, the 25-year golden period culminating in the centenary of Indian independence in 2047, the country aspires to undergo a vital transformation. The target: a developed nation with a $30 trillion economy by 2047. Ambitious as it sounds, not just economic volume but a redefinition of national identity. But a nearer look reveals a disconcerting puzzle.

India, despite ranking as the world's fourth-largest economy by total GDP, is still designated by the World Bank as a Lower Middle-Income Country (LMIC), with a modest per capita gross national income (GNI) of only $2,940. This economic standing groups it alongside nations such as El Salvador and Equatorial Guinea - well behind its BRICS counterparts like Brazil and China. Such a stark contrast between the country's aggregate economic size and individual prosperity raises a critical question: Can the vision of Viksit Bharat be realised without substantially improving the income levels of its citizens?

India’s GDP stands at $4.27 trillion, making it the world’s fourth-largest economy by size. It is also projected to record the highest real GDP growth rate among the top 13 economies in 2025 at 6.5 per cent. Yet, this narrative of ascendancy is undercut by a sobering statistic: India ranks the lowest among these same economies in terms of GDP per capita, reflecting widespread income disparity. China, with a nearly equivalent population, boasts a per capita GDP of $13,870 i.e. 4.72 times higher than India's. Even countries with turbulent economic histories like Brazil or Russia maintain per capita income levels significantly ahead. This points not just to population size but to persistent structural inefficiencies and income distribution issues that dilute India’s growth story.

India, in the cusp of a rapidly emerging economy aspires not only to be in the league of nations but also ascend to the third-largest economy in the world by its sheer volume of GDP. The Viksit Bharat has a targeted GDP of $30 trillion, to be achieved by 2047. To achieve this benchmark, there needs to be a tenfold increase in the GDP during this Amritkaal phase, which implies that India requires around 9.1 per cent real GDP growth rate between 2023-24 to 2047-48, against a backdrop of 6.5 per cent real GDP growth rate in the foundational FY 2024-25. A word of caution here though. The fixation on GDP as a sole indicator of development masks deeper weaknesses. In this context, India’s pursuit of a $30 trillion GDP, while symbolic of ambition, must not overshadow foundational concerns such as skewed income distribution, jobless growth, underinvestment in human capital and corruption.

Prime Minister Narendra Modi outlined his vision for “Make India Great Again” (MIGA) during his official visit to the US, reflecting Poet Laureate Atul Prasad Sen’s vision that India will again take the best seat in the world assembly. The economic greatness of our country lies in its multidimensionality, encompassing economic sustainability, equity, and fiscal prudence. The leading macroeconomic parameters needs to be in balance with a sound fiscal health, for a country to be economically sustainable. But for a country traversing the aspirational journey from emerging economy to economic powerhouse of the world requires a big push.

The World Bank Group assigns the world’s economies to four income groups, low, lower-middle, upper-middle, and high. The classifications are updated each year on July 1, based on the GNI per capita of the previous calendar year. According to the World Bank country classification by income level for 2024-25, India is in a state of lower middle income country (LMIC) in terms of GNI per capita ($1146 - $4515). India with a gross national income per capita of $2,940 or Rs 255,606, is the only BRICS nation still holding the lower-middle income status. Economists often refer to this situation as the 'middle-income trap', a scenario where countries achieve a certain income level but stagnate before becoming high-income economies. Latin American countries like Brazil and Argentina exemplify this trap. Despite decades of development, they remain stuck in the Middle-Income category without meaningful progress toward developed status. India’s current LMIC status, therefore, is not just a stage, it's a potential trap. Unless policymakers aggressively shift the focus from aggregate GDP to inclusive growth, productivity enhancement, and income equity, India risks repeating this historical pattern.

Herein lies the paradox, what are we prioritising during this Amritkaal? Can we elevate our country from lower-middle income to at least upper middle-income status by 2047? Several countries have successfully transitioned from middle to high income. These transitions were underpinned by focused reforms and institutional resilience. Examples includes South Korea which invested heavily in human capital and technological upskilling, China, which leveraged manufacturing and export-driven strategies and Malaysia, which built a strong base of infrastructure and public services. India must adapt these lessons to its own socio-economic context. As per World Bank country classification by income level (FY 2024-25), there are 86 high income countries and 54 upper middle-income countries. India has still a long way to go to clinch her glory in the world in real terms.

India’s demographic advantage, over 800 million people in the working-age bracket, is a blessing. India’s public debt is 83 per cent of GDP, on the higher side for an emerging economy. Fiscal consolidation is underway, but public investment will have to be significantly ramped up. Infrastructure, health systems, and green energy are all capital-intensive sectors. This means India must deepen its financial markets, attract foreign institutional investments, and improve credit availability to micro and small enterprises. India’s digital public infrastructure, from UPI to Aadhaar to ONDC, is a global model. But scaling innovation beyond fintech into agriculture, manufacturing, and services is critical. This requires liberalised R&D regimes, startup-friendly policies, AI and automation integration and global academic collaboration.

The challenge to elevate India to a high-income country demands a long-term strategic roadmap, robust and targeted public policies, corruption free governance and a true coordinated effort. The need of the hour is to push ourselves from this (lower) middle-income trap, placing major thrust on inclusivity and income equality, good governance, and regulation. India’s $30 trillion GDP goal by 2047 must go hand-in-hand with income equality, social justice, and mature institutions. True development is seen in the upliftment of 1.45 billion lives, not just GDP charts. It requires a recalibration of priorities, placing people-centric growth at the core.

(About The Authors: Joydeep Sen is a corporate trainer and author. Dr. Sumana Chaudhuri is Prof and Asst. Dean Research, DSIMS)

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