India has attained a virtuous cycle of accelerated growth and macroeconomic stability and if the past rates of growth are maintained, many States will become or come close to becoming “rich” by 2047, according to RBI Deputy Governor Poonam Gupta.

Gupta highlighted that India’s economic growth has consistently accelerated since the early 1980s, with the average real gross domestic product (GDP) growth increasing from 5.7 per cent in the 1980s to 5.8 per cent in the 1990s, rising further to 6.3 per cent in the 2000s, to 6.6 per cent in the 2010s, and reaching 7.7 per cent in the most recent four-year period.

She emphasised that the acceleration is even more pronounced in per capita income. From about $274 in 1981 and $306 in 1991, per capita income has risen nearly tenfold to around $2700 in 2024.

“Importantly, while it took over two decades for per capita income to double initially, it has expanded by almost fivefold in the subsequent two decades, indicating a clear structural shift in growth momentum,” Gupta said at the Raj Centre on Indian Economic Policy at Columbia University.

As per the forecasts in October 2025 World Economic Outlook (WEO) of the IMF, per capita income is projected to increase to $2818 in 2025, $3051 in 2026 and $4346 in 2030.

The Deputy Governor said that decline in population growth, too, has contributed to faster per capita income growth. India’s population growth, once significantly above the global average, has steadily moderated and has converged to global levels since around 2014, amplifying gains in per capita terms.

She emphasised that macroeconomic stability is reflected in sustainable and resilient outcomes across inflation, the current account balance, fiscal position, debt quality and financial sector health, among others.

Further, key macroeconomic outcomes, especially growth (overall and sectoral) and inflation, are broadly less volatile and move within a narrower, more predictable range.

Narrowing inflation

Gupta said that inflation has declined at a faster rate than in most economies, resulting in a narrowing of the inflation differential vis-à-vis advanced economies and other emerging and developing economies.

India’s decadal average current account deficit has varied within a moderate range of 0.5-2.2 per cent of GDP since 1990 and has remained modest in recent years.

The Deputy Governor observed that the banking sector has undergone a structural turnaround — following a decade-long phase of balance sheet repair, banks today are significantly stronger and better capitalised, both historically and relative to their peers.

“On the fiscal front, while deficit and debt levels rose during Covid-19, India has retreated to a path of consolidation, with a clear focus on reducing deficits and stabilizing debt over the medium term.

“There has been a distinct focus on enhancing the quality of fiscal outcomes, with a notable shift towards capital expenditure, thereby strengthening the growth potential of the economy. These improved outcomes are attributed to robust policy frameworks and nimble policy responses,” the Deputy Governor.

States have become more prosperous

Gupta underscored that States have become more prosperous than before. India’s growth story consists of broad-based prosperity, with every State recording a significant increase in per capita gross state domestic product (GSDP) over the past two decades, indicating that progress has been nationwide rather than confined to a few States or regions, she added.

The Deputy Governor said in the last two decades, average per capita incomes across States have surged nearly five-fold in current US dollar terms and more than threefold in constant rupees, underscoring the strength and sustained pace of India’s long-term income gains.

“Yet, the pace of income growth has varied across states. Some States have become 5-10 times more prosperous over the last two decades, while others have recorded more modest gains of around three times.

“Per capita income levels in more prosperous States have grown faster than in relatively less prosperous ones. The fact that richer States have experienced greater prosperity than the poorer States in the past, and that this trend has not reversed, implies that income levels across States have not been converging,” she said.

Gupta observed that notwithstanding this, the extent of divergence has weakened considerably over time. In other words, the growth gap between richer and poorer States has narrowed in recent years.

“India’s per capita income is projected to grow by 4 times in USD terms by 2046-47. This expansion is expected to be broad-based: both above-median and below-median states are projected to record substantial gains, with below-median States contributing considerable momentum, reinforcing the inclusive nature of India’s growth trajectory,” she said.

Published on May 11, 2026