The Business Bytes
New Delhi, October 4, 2024 (TBB Bureau): Finance Minister Nirmala Sitharaman on Friday said that India’s per capita income is projected to increase by at least $2,000 over the next five years, driven by overall economic growth.
Speaking at the Kautilya Economic Conclave, organized by the Ministry of Finance in collaboration with the Institute of Economic Growth (IEG), Sitharaman highlighted the significant strides the country has made in recent years.
Reflecting on the economic trajectory, Sitharaman noted that it took India 75 years to reach a per capita income of $2,730. However, she emphasized that the next phase of growth is expected to occur rapidly, supported by robust investments, strong economic fundamentals, and a commitment to ongoing policy reforms.
One of the key factors fueling this optimistic outlook is India’s demographic dividend. Sitharaman pointed out that nearly 43 percent of the population is under 24 years old, which she identified as a crucial driver for organic consumption growth. “We are much better off than many other countries, even if they are advanced economies. Today, they are struggling to grow. We are standing out as an economy which is growing at the fastest rate in the last few years,” she said.
The Finance Minister also discussed the broader global context, stating that India is currently navigating a global geopolitical repositioning. This repositioning presents opportunities for India, creating robust supply chains with countries that share strategic interests.
In terms of long-term projections, a key document from NITI Aayog anticipates that India will become a $30 trillion economy by 2047, with a per capita income of $18,000 annually. The country is on track to become the third-largest economy in the world, with the potential to add $1 trillion to its GDP every 1.5 years, driven by strong GDP growth, a focus on robust manufacturing, and an emphasis on infrastructure development.
Sitharaman highlighted the significant progress made since the previous government, stating that India has transformed from being part of the “Fragile Five” to now being recognized among the “Top Five” economies under the BJP-led NDA government. This transformation has earned India recognition as an emerging superpower of the 21st century.
