India 2047 and the middle income trap
India has set itself the goal of becoming a developed country by 2047, the 100th anniversary of its independence. By one measure, the threshold for high-income used by the World Bank, this requires a five-fold increase in its real per capita income in dollar terms over the next two decades. Even during times of global economic prosperity such as 1990-2018, it has been difficult for middle-income countries to sustain growth rates of over 7 percent over long periods and avoid prolonged recessions. For India to succeed in doing what so few have done, it will have to simultaneously grow its capital, talent, and energy endowments and—even more importantly—improve the efficiency with which it transforms these resources into economic output and living standards. The domestic and global transformations underway in demography, geopolitics, and technology greatly favor India in allocating its capital, labor, and energy resources more productively than it does now. But to take advantage of these changes, India must quickly become more open to foreign trade, investment, and technology; ever more effective in improving the quality of education; ever more diligent in instituting equal opportunity arrangements for women, minorities, and other disadvantaged sections of society; and ever more efficient in energy use. Instead of debating “vertical” or industrial policies to favor services, manufacturing, or agribusiness, India should prioritize “horizontal” or economy-wide initiatives on entrepreneurial freedom, education quality, equal opportunity, and energy efficiency.
In this webinar, held on 28 March 2025 at 2:30 pm, keynote speaker Indermit Gill, along with Mario Pezzini and Sergio Lugaresi, discussed these issues in depth. You can watch the video of the conference above.
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Indermit Gill is Chief Economist of the World Bank Group and Senior VP for Development Economics. Before this, he was VP for Equitable Growth, shaping the Bank’s response to global shocks. He led the 2009 World Development Report on economic geography and introduced the “middle-income trap” concept. A former professor at Duke, he has published on sovereign debt, green growth, labor markets, and inequality. Gill holds a Ph.D. in economics from the University of Chicago.
