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India’s GNI per capita to increase by nearly 8 times from current USD 2,540: FC chairman

Tirupati, Apr 17 (UNI) Chairman of the 16th Finance Commission of India and the first Vice Chairman of NITI Aayog, Prof Arvind Panagariya, has said that in order to transition from a middle-income economy to a high-income economy, India's gross national income (GNI) per capita would have to increase by nearly eight times from the current USD 2,540 in 2023 (currently India is in the lower-middle-income category).
Also, a sustained average annual growth rate of 7.8 percent over the next 24 years would be required to achieve this goal.
IIT Tirupati here on Thursday hosted a lecture by Prof Panagariya, Chairman of the 16th Finance Commission, on the theme “India in the Global Economy: The Next Decade.”
Delivering keynote address, Prof Panagariya spoke on the feasibility of this goal by citing India’s growth trends in the last two decades, where India’s GDP not only grew at 8-9 percent but also overcame several setbacks like the Global Financial Crisis, the Covid-19 pandemic, and domestic financial challenges.
He emphasized that in this period, India has demonstrated resilience and growth potential.
Prof Panagariya outlined the three key factors supporting India’s future transition from low per capita income to high per capita income: Significant scope exists for catching the growth, similar to China's and Korea’s past trajectories. Innovation, supported by skill acquisition and technology adoption, is essential for increasing per capita income.
India benefits from a large, young working-age population, translating into higher savings, scalable service delivery, and increased productivity. Though reforms progress more slowly in a democratic setup, India has made steady headway in key areas such as infrastructure development.
Landmark projects like the Atal Setu and the New Parliament building illustrate India’s growing capacity to execute large-scale projects. There is now a pressing need to scale up private enterprises and improve employment in high-productivity sectors, especially in manufacturing.
He addressed concerns about underemployment and the need to shift workers from low-productivity micro-enterprises to more productive firms. Stressing the importance of labour and land reforms, Prof Panagariya called for policies that enable enterprise growth and better workforce absorption by the private sector.
In response to an engaging session, Prof Panagariya acknowledged the lag in manufacturing growth, citing restrictive labour laws as a key bottleneck.
He emphasized the need for medium-sized enterprises to scale up and highlighted industry-led skilling as crucial for enhancing workforce productivity.
Prof K N Satyanarayana, Director, IIT Tirupati also spoke.
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