New Delhi: India has overtaken several economies in terms of GDP over the past decade, but its citizens’ per capita income remains low. In this context, a report by Llama Research suggested that the next phase of India’s growth must translate into individual prosperity. Manufacturing scale-up, digital formalisation, and rising income tiers are some of the factors working to India’s advantage.
Noting that India ranks the lowest in per capita income among the top 10 economies, Llama Research asserted, “This isn’t a flaw; it’s a window of compounding potential.” A tech-savvy population, solid policy framework, room for long-term capital formation, and macroeconomic stability are other positives for India, according to the report.
“India is not just rising in rank; it’s building the foundations to lead from the ground up,” Llama Research stated in its report, India’s Growth: Journey from Size to Strength.
To realise the vision of Viksit Bharat—a developed nation by 2047—India will need to achieve an average growth rate of around 8 percent at constant prices for about a decade or two, according to the Economic Survey document for 2024–25, tabled on January 31.
India has made a significant turnaround, climbing the ladder of economic growth. From ranking 11th in 2013–14, India has positioned itself to become the fourth-largest economy. Even as India has surpassed many countries in terms of the size of its economy over the past decade, per capita income remains very low.
In 2013, India was placed in the league of the ‘Fragile Five’ economies—a term coined by a Morgan Stanley analyst to describe five emerging countries, including India, whose economies were underperforming. The other four countries were Brazil, Indonesia, South Africa, and Turkey.
Currently, India is the fifth-largest economy and among the fastest-growing major economies. It is projected to maintain this momentum over the next few years, according to many global agencies.
In the current financial year, India is set to overtake Japan to become the world’s fourth-largest economy, as projected by the IMF.
As widely expected, the Indian economy grew by 6.5 percent in real terms in the recently concluded financial year 2024–25. In 2023–24, India’s GDP grew by an impressive 9.2 percent. According to official data, the Indian economy grew by 8.7 percent and 7.2 percent in 2021–22 and 2022–23, respectively.
