India’s Per Capita Income will Grow by 70% by 2030, predicts Standard Chartered Bank

New Delhi, 31st July 2023: Standard Chartered Bank predicted in a recent study report that India’s per capita income will rise by about 70% to $4,000 by fiscal 2030, up from $2,450 in fiscal 2023.

This rise is predicted to help the country achieve middle-income status, with a GDP of $6 trillion. Notably, home consumption will account for more than half of this GDP.

The analysis predicts that India’s per capita income and GDP would rise in the next years. Per capita income increased dramatically from fiscal 2001 to fiscal 2021, growing from $460 to $2,150. It is expected to reach $2,450 by fiscal 2023.

According to Standard Chartered Bank’s predictions, external trade will be the primary driver of growth, nearly doubling to $2.1 trillion by 2030, up from $1.2 trillion in fiscal 2023, when GDP was $3.5 trillion. The analysis forecasts an exceptional jump in external trade based on a sustained ten percent yearly growth rate in nominal GDP.

Household consumption is the report’s second key growth driver. It is expected to rise from $2.1 trillion in fiscal 2023 to $3.4 trillion by fiscal 2030, equal to the current size of the total GDP. Currently, household spending accounts for 57 percent of the country’s GDP.

Prime Minister Narendra Modi has stated his intention to ensure that the economy reaches $5 trillion in his next term if he wins elections and returns to power. If India reaches this milestone, it will be the world’s third-largest economy, surpassing Japan and Germany.

The research also predicts that nine states will attain to upper-middle-class status, with a per capita income of $4,000. However, the names of these states have not been revealed.

Telangana currently leads the league table in terms of per capita income with Rs 2,75,443 in fiscal year 2023, followed 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.

Nonetheless, according to the survey, Gujarat is predicted to lead in per capita income by fiscal 2030, followed by Maharashtra, Tamil Nadu, Karnataka, Haryana, Telangana, and Andhra Pradesh.

Telangana, Delhi, Karnataka, Haryana, Gujarat, and Andhra Pradesh account for 20% of the national GDP and are expected to achieve a per capita GDP of $6,000 by 2030.

However, major states like Uttar Pradesh and Bihar, which account for 25% of the country’s population, are predicted to have per capita incomes of less than $2,000 even in fiscal 2030, which is still more than double current fiscal 2020 levels.

According to the research, India’s household consumption expenditure currently accounts for 57% of its GDP. Even if the share of household expenditure falls by 1%, the size of the consumer market will remain equal to the size of the total economy.

Furthermore, the report stated that the increased proportion of the working-age population will continue to play an important role in driving economic growth.

The proportion of the working-age population in the country is expected to rise from 64.2 percent in 2020 to 64.8 percent by 2040 before falling to 61.1 percent in 2050. This demographic advantage is predicted to boost labour productivity, capital deployment, and long-term growth.