According to a research report by Standard Chartered Bank, India’s per capita income is expected to grow by approximately 70% by 2030, reaching $4,000 from the current level of $2,450. This substantial increase in income is projected to transform India into a middle-income economy with a GDP of $6 trillion, with household consumption contributing significantly to this growth.
Over the past two decades, India’s per capita GDP has experienced substantial growth, rising from $460 in 2001 to $2,150 in 2021.
The research report highlights external trade as the primary factor driving significant economic growth, with an anticipated doubling of trade value to $2.1 trillion by 2030. This remarkable increase would be a significant jump from the $1.2 trillion recorded in fiscal 2023, when India’s GDP stood at $3.5 trillion. The report assumes an annual nominal GDP growth rate of 10% going forward.
In addition to external trade, household consumption is identified as the second major contributor to India’s economic expansion. The report projects household consumption to reach $3.4 trillion by fiscal 2030, equivalent to the current size of the GDP. In comparison, household consumption in fiscal 2023 was at $2.1 trillion, constituting approximately 57% of the GDP at that time.
Prime Minister Narendra Modi has repeatedly promised to position the Indian economy among the top three globally during his next term in office and achieve a GDP of $5 trillion. Currently, Japan holds the third position after the United States and China.
Among the states, Telangana currently leads in per capita income rankings, with ₹2,75,443 (equivalent to $3,360). Close behind are Karnataka with ₹2,65,623, Tamil Nadu with ₹2,41,131, Kerala with ₹2,30,601, and Andhra Pradesh with ₹2,07,771.
However, the Standard Chartered report envisions a shift in these rankings by fiscal 2030, with Gujarat projected to take the lead in per capita income, followed by Maharashtra, Tamil Nadu, Karnataka, Haryana, Telangana, and Andhra Pradesh. While the report does not disclose the names of the other three states, it suggests that they will not be among the top performers.
Currently, the combined contribution of Telangana, Delhi, Karnataka, Haryana, Gujarat, and Andhra Pradesh to the national GDP stands at 20%. By fiscal 2030, these states are expected to achieve a per capita GDP of $6,000. On the other hand, large states like Uttar Pradesh and Bihar are projected to have per capita income of less than $2,000 by fiscal 2023, which is still twice their current levels.
The growth of India’s economy will continue to be driven by the increasing proportion of the working-age population. In 2020, working-age individuals accounted for 64.2% of the total population. This figure is expected to rise slightly to 64.8% in the coming years. However, a marginal decline to 63.6% is projected by the year 2040, further decreasing to 61.1% by 2050. Despite this gradual decrease, the working-age population will continue to play a pivotal role in shaping the nation’s economic development.