GDP Growth: India’s GDP growth rate is estimated to be 6.5% in the financial year 2024-25, but sustained growth of 7.8% will be necessary to become a high-income country by 2047. The World Bank has suggested that India will have to prioritize reforms in land, labor and financial sectors.
GDP Growth: India’s economic growth rate has declined to 6.2% in the third quarter of FY 2024-25 mainly due to poor performance of the manufacturing and mining sectors. According to data released by the National Statistical Office (NSO), the Indian economy registered a growth of 6.2% in the October-December 2024 quarter, as against 9.5% in the same period a year ago. Apart from this, the gross domestic product (GDP) growth rate was 5.6% in the July-September quarter of the current financial year.
The NSO has said in its second advance estimate of national accounts that the country’s growth rate for the current financial year will be 6.5%. This rate was 6.4% in the first advance estimate released in January 2025. The NSO revised the GDP growth rate for the last financial year (2023-24) to 9.2%, which was earlier stated to be 8.2%.
7.8% growth is necessary to become a high-income country
The World Bank has said in its report ‘Becoming a high-income economy in a generation’ that India will have to grow at an average rate of 7.8% to become a high-income country by the year 2047. To achieve this goal, there will be a need to reform the financial sector as well as land and labor markets. According to the report, India’s average growth rate between 2000 and 2024 has been 6.3%. However, to become a high-income economy by 2047, India’s per capita gross national income (GNI) will have to increase almost eight times from the current levels.
Need to increase the pace of reforms
The report says that India will need to increase the pace and intensity of reforms keeping in mind the current global economic environment. According to the World Bank, the scale and speed at which India has achieved economic development in the last decades provides a strong foundation for its future ambitions.
Need for rapid economic reform
The World Bank report says that India will have to implement many structural reforms to become a high-income economy by 2047. The report has pointed out the need for reform in some areas.
- Promoting manufacturing and industrial sector: India needs to move faster towards becoming a global manufacturing hub.
- Improvement in infrastructure and logistics: Road, transport and digital connectivity need to be strengthened.
- Human resource development: More focus needs to be given to education and skill development.
- Maximum use of digitalisation and technology: Digital India campaign needs to be taken forward.
- Land and labour reforms: Land and labour laws need to be changed to facilitate trade and investment.