Viksit Bharat 2047: Growth Arithmetic Matters More Than Rhetoric
Whether India reaches high-income status by 2047 will be decided in the next decade, not the last one
Dibyendu Maiti: Delhi School of Economics
Bishwanath Goldar: Institute of Economic Growth
SDG 8: Decent Work and Economic Growth | SDG 4: Quality Education
Ministry of Finance | Ministry of Education | Ministry of Skill Development and Entrepreneurship
India’s ambition of becoming a high-income Viksit Bharat by 2047 is often framed as a question of political will or administrative resolve. The harder truth is that aspiration does not compound. Arithmetic does. Whether India reaches high-income status within a little over two decades will be decided less by slogans than by the interaction of three measurable forces: investment, human capital, and productivity.
For a country whose policy machinery now operates through medium-term frameworks – Union budgets, Finance Commission cycles, sectoral missions, and multi-year infrastructure pipelines – the challenge is no longer defining intent. It is whether these instruments are being aligned quickly and coherently enough to deliver sustained high growth.
What The Numbers Actually Require
India’s per capita income today stands at roughly USD 2,200 (constant 2015 prices). Crossing the World Bank’s high-income threshold by 2047 implies reaching around USD 12,700 – more than a fivefold increase. That arithmetic translates into an average sustained real per capita income growth of about 8 percent a year for over two decades.
India has briefly touched such growth rates before, most notably during 2003–07. But those episodes proved fragile. Growth slowed after the global financial crisis, weakened further due to domestic balance-sheet stress, collapsed during the pandemic, and has since recovered unevenly. International experience offers a sobering parallel: even celebrated success stories such as South Korea and China saw growth decelerate once easy productivity gains were exhausted, well before reaching advanced-economy income levels.
Because growth tends to slow as economies mature, sustaining an average growth rate of around 8 percent over the next 23 years would likely require India to grow at close to 10 percent annually for roughly the next decade, before deceleration sets in. High growth, in other words, cannot be postponed; it must be front-loaded.
Investment: Quantity, Quality, and Trade-Offs
India’s (physical) investment-to-GDP ratio peaked above 40 percent in the mid-2000s, fell to around 29 percent by 2021, and has since recovered to roughly 33 percent. A credible high-income trajectory requires this ratio to move back towards 40 percent, and remain there for an extended period.
This is where growth arithmetic meets political economy. Raising investment is not just a technocratic adjustment; it requires difficult fiscal choices. In practice, it means balancing capital expenditure against revenue spending, targeted welfare against universal subsidies, and near-term consumption support against long-term growth. Higher public investment also requires stronger execution, while private investment depends on stable policy regimes, enforceable contracts, and demand conditions that justify long-term commitments.
Even so, higher investment on its own cannot deliver the income leap implied by Viksit Bharat. Simulations show that raising the investment rate from 33 to 40 percent, without parallel gains in skills or productivity, lifts projected 2047 per capita income only from about USD 7,288 to around USD 7,900 – well short of high-income status. Worse, inefficiencies in public investment – through leakages, delays, or misallocation – can sharply blunt the payoff. If such inefficiencies reduce the effective (productively realised) investment rate from the current 33 percent to 29 percent, projected per capita income in 2047 falls by about USD 620 per person, declining from roughly USD 7,288 to about USD 6,668. Quantity without quality does not compound.
Human Capital: From Access to Outcomes and Absorption
Physical investment is visible, human capital is not; and that invisibility has made it a binding constraint. Measured by schooling and labour-market returns to education, India’s human capital stock has grown at just over 1 percent a year over the past decade. This pales when compared with around 3 percent in upper-middle-income economies and about 4 percent in high-income countries.
The constraint is threefold: what students actually learn, how skills are upgraded after formal schooling, and whether the economy absorbs those skills productively. Simply expanding enrollment or years of schooling no longer delivers commensurate productivity gains.
A human capital growth near current levels, even with an investment rate approaching 40 percent, caps income gains. Raising human capital growth to around 2.5 percent a year – through better learning outcomes, stronger tertiary education, effective vocational pathways, and improved population health – adds roughly USD 1,500 per person to projected 2047 income. But even this potential depends on how effectively the economy converts skills and capital into output.
Productivity: Where The Vision is Won or Lost
This conversion is governed by productivity – specifically, total factor productivity (TFP), which captures how effectively an economy combines capital and labour as institutions, technology, and organisation improve. Without productivity gains, adding more machines and workers eventually yields diminishing returns – each new factory, road, or worker adds less to output than the previous one.
India’s TFP growth has averaged about 1.3 percent a year in recent decades. At that pace, productivity becomes the binding constraint on long-term growth, too weak to offset rising costs and shocks – particularly those from climate change, volatile energy prices, a high social cost of carbon, and a more fragmented global economy.
Scenario analysis suggests that only when TFP growth rises towards 3 percent annually – alongside higher investment and faster human capital accumulation – does India approach the income threshold required by 2047. This acceleration is not implausible. Nearly half of India’s workforce is still employed in agriculture, and movement of labour towards manufacturing and modern services can generate large productivity gains through reallocation across reallocation. Rapid formalisation of informal manufacturing and services – bringing firms into the tax, credit, and regulatory net, where productivity remains far below the formal sector – offers another major channel. Manufacturing has already been the largest contributor to TFP growth in the post-global-financial-crisis period.
The Early-2030s Test: A Point of No Return
If 2047 is the destination, the early 2030s are the point of no return. Treating long-term targets as distant horizons and back-loading reforms is not just risky; it is arithmetically inconsistent with sustained high growth.
A pragmatic halfway test emerges around 2030–32. By then, the investment-to-GDP ratio needs to approach 36 percent, human capital growth should rise to around 1.5 percent annually, and TFP growth must reach about 2 percent if the 2047 goal is to remain credible. Missing these thresholds does not merely delay the vision; it mechanically pushes the economy onto a lower income trajectory that becomes extremely difficult to reverse later.
From Vision to Growth Strategy
Viksit Bharat is less a slogan than a demanding macroeconomic programme. Existing policy strands – the push for manufacturing through production-linked incentives, digital governance reforms aimed at reducing leakages, infrastructure expansion, and commitments to green growth – can support this ambition. But they must be explicitly aligned with to raise effective investment, accelerate skill formation, and lift productivity, rather than pursued as parallel, loosely connected initiatives.
The arithmetic does permit a high-income India by 2047, but it leaves little room for complacency. Failure to front-load growth now risks locking India into an upper-middle-income trajectory, determining whether 2047 marks arrival, or recalibration.
Authors:
The discussion in this article is based on the authors’ research published in Economic and Political Weekly (volume 60). Views are personal.