India Ratings and Research (Ind-Ra) predicts that eight states in India will boast economies surpassing $1 trillion as the nation progresses toward becoming a developed nation by fiscal year 2047, according to a recent report. Ind-Ra projects Maharashtra, Karnataka, and Gujarat to lead the pack, achieving this milestone by fiscal year 2039.
Ind-Ra anticipates Maharashtra to be the first to reach the $1 trillion mark, followed by Karnataka, Gujarat, and Tamil Nadu. However, Uttar Pradesh is expected to achieve this target later, by fiscal year 2042.
Despite these projections, some states may miss their self-imposed targets for reaching a $1 trillion economy. For instance, Maharashtra aims to achieve this goal by fiscal year 2028, followed by Uttar Pradesh and Tamil Nadu in 2030, and Karnataka by 2032. In fiscal year 2023, Karnataka surpassed Uttar Pradesh to become the third-largest state economy.
India’s overarching goal is to reach a $5 trillion economy by fiscal year 2028, but at the current growth rate, only three states are expected to approach the $0.5 trillion mark by that time.
However, the journey for states to attain developed nation per capita income levels may take longer. Most Indian states fall into the lower middle-income category, with per capita incomes ranging from $1,086 to $4,255. As of fiscal year 2023, Goa and Sikkim were the only states classified in the upper middle-income category, while Uttar Pradesh and Bihar remained in the low-income group.
India’s national per capita income has witnessed a compounded annual growth rate of 4.2% between fiscal years 2014 and 2023. However, states like Chhattisgarh, Uttar Pradesh, Rajasthan, West Bengal, Bihar, Jharkhand, and Punjab have grown slower than the national average, while seven other states have experienced growth rates exceeding 6%.