India to be a High Middle Income Economy

NEW DELHI: The goods and services tax (GST) and the Narendra Modi-led government’s resolve to push reforms could make India a high middle income economy in 30 years, according to the World Bank. The multilateral development bank, which recently released its ease of business ranking putting India at the 100th place - a 30-notch jump over the previous ranking - also praised the government’s efforts to improve the business climate of the country. 

World Bank CEO Kristalina Georgieva said a jump of this nature is “very rare since the beginning of the survey 15 year ago”. “It is particularly rare when we talk about size of India. I understand that in a cricket-loving nation hitting a century is a very important milestone,” she said.

India’s entry into the top 100 of World Bank’s Ease of Doing Business global rankings is on the back of sustained business reforms over the past several years. Speaking at an event organised by the commerce ministry here on Saturday, Georgieva said high-level ownership and championship of reforms is critical for success. “We have learnt that in reforms what pays off is persistence...what we are recognising in India is that this success today is to be turned into more energy in reforms for the future.” 

Praising the efforts of Prime Minister Narendra Modi 
to carry forward reforms, including unification of indirect taxes, the World Bank CEO said the GST reform creates an incredible opportunity for India to grow through unified internal market. 

There is visible impact of reforms on foreign investment, she said, adding that foreign direct investment has doubled to $60 billion from $36 billion in 2013-14. 

“We know that there is a very strong condition that extreme poverty would be history in India. The target date that was set 2026, I understand that the Prime Minister intends to shorten to 2022. Given the track record so far, I have no doubt that would be possible. And, I have no doubt that when India hits another century, the century of independence in 2047, most people in India would be the part of global middle class. India will be a high middle income country,” she said.

Noting that doing business is very pragmatic way to demonstrate that progress is being made, she said the World Bank looks at doing business achievements in the broader context. 

“What we have seen is remarkable overall success story of India. Extraordinary achievements in the last three decades, the per capita income has quadrupled,” she said.