According to numerous forecasts, India will become the world’s third largest economy within the next six years.
According to the World Bank, high-income economies have a per capita Gross National Income (GNI) of $13,846 (£10,870) or more.
India is among the lower middle-income countries, with a per capita income of approximately $2,400 (£1,885). Many academics have warned for years that India’s economy is on the verge of a “middle income trap”.
This occurs when a country’s ability to attain rapid development and compete with sophisticated economies declines. According to economist Ardo Hannson, it is a situation in which countries “seem to get stuck in a trap where your costs are escalating and you lose competitiveness.”.
A new World Bank report expresses similar concerns. According to the World Development Report 2024, India will need 75 years to reach a fifth of America’s per capita GDP if it continues to expand. It also states that more than 100 countries, including India, China, Brazil, and South Africa, face “serious obstacles” that could impede their ambitions to become high-income countries in the next decades.
Researchers analyzed data from 108 middle-income countries, which account for 40% of global economic output.
