India’s Average Income Projected to Increase by 70% to $4,000 by FY30
Ira Singh
1 Aug’23
In a promising development for the Indian economy, financial experts have projected a significant surge in the country’s average income over the next seven years. According to the latest economic forecasts, India’s average income is expected to grow by a staggering 70% and reach $4,000 by the fiscal year 2030 from $2,450 in fiscal year 2023.This will make India a middle-income economy with a $6 trillion gross domestic product (GDP) with about half coming from household consumption
The projection comes as a result of various factors that are anticipated to drive India’s economic growth in the coming years. The government’s commitment to economic reforms, ongoing initiatives to boost foreign direct investment, advancements in various sectors, and a rapidly expanding workforce are some of the key drivers behind this optimistic forecast.
According to a weekend report by Standard Chartered Bank, the nominal GDP is forecast to grow by 10 per cent annually. The main growth driver is external trade, which may double to $2.1 trillion by 2030 from $1.2 trillion in fiscal year 2023.
Household consumption is said to be the second-biggest growth driver, according to the report. By fiscal year 2030, consumption is expected to jump from the present $2.1 trillion to $3.4 trillion, which is as big as the GDP for fiscal year 2023.
In a statement made last week, Prime Minister Narendra Modi said that he would ensure that India’s economy is brought to $5 trillion during his next term in office, making it the third-largest behind the US and China. Japan is now ranked third, while Germany is fourth.
The report predicts that nine states, rather than just one, will eventually reach the upper middle-income country category with a per capita income of $4,000 or more. Telangana currently holds the top spot in the league table for per capita income, with Rs 2,75,443 ($3,360) in FY23. Karnataka is next 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.
India’s consistent efforts to strengthen its manufacturing and service sectors have been contributing to increased productivity and job creation, which in turn has a positive impact on average household incomes. The growth of India’s technology industry, including information technology services and startups, has also played a pivotal role in fostering economic development and generating higher incomes.
Moreover, the country’s demographic dividend, with a large proportion of the population in the working-age group, is anticipated to further support economic growth. As more young people enter the workforce, consumption levels are expected to rise, leading to increased economic activity and a boost in average income.
However, despite the promising forecast, economists have emphasized the need for continuous policy reforms, infrastructure development, and skilling programs to sustain this growth trajectory. Addressing income inequality and ensuring inclusive growth will also be crucial in realizing the full potential of India’s economic expansion.
The government and private sector are expected to work hand-in-hand to capitalize on the current economic momentum and address challenges that may arise in the process. International partnerships and trade agreements are also likely to play a vital role in bolstering India’s economic growth and income levels.
As India moves forward with its growth agenda, the world will be keenly observing the country’s progress, as it not only benefits its own citizens but also contributes significantly to global economic growth.
Overall, the projection of India’s average income increasing by 70% to $4,000 by FY30 paints a promising picture of the country’s economic future, offering hope for a brighter and more prosperous India.