MUMBAI (Reuters) - India will need to grow at a rate of 7.6% annually for the next 25 years to become a developed nation, according to a research paper published by the central bank in its monthly bulletin on Monday.
India's per capita income is currently estimated at $2,500, while it must be more than $21,664 by 2047, as per World Bank standards, to be classified as a high-income country.
"To achieve this target, the required real GDP compounded annual growth rate (CAGR) for India works out to be 7.6% during 2023-24 to 2047-48," according to the study by the Reserve Bank of India's economic research department.
In nominal terms, which includes the impact of inflation, the economy would need to clock a CAGR of 10.6%, said the study, which does not represent the RBI's official view.
"It may, however, be mentioned that the best (nominal growth) India achieved over a period of consecutive 25 years in the past is a CAGR of 8.1% during 1993-94 to 2017-18."
To reach that level of sustained growth, India requires investment in physical capital and reforms across sectors covering education, infrastructure, healthcare and technology, the study said.
The country's industrial and services sector would need to grow at over 13% annually for these 25 years for India to achieve developed economy status, it said.