India’s per capita income may touch $10,000 by 2039: Basu

India’s per capita income may touch $10,000 by 2039: Basu

Washington: India’s per capita income could touch $10,000 by 2039, up from $1,000 at present, if sustained economic growth of over 8% is maintained for the next 25 years, the country’s chief economic advisor Kaushik Basu said.

Addressing economists, investors and academicians here, Basu said the fundamentals of the Indian economy are strong enough in the medium and long term to sustain a healthy growth rate of over 8%.

“The per capita income of India will reach $10,000 by the year 2039... if India maintains its GDP growth at 8 to 8.5% for the next 25 years," Basu said at the ‘US-India Economic and Financial Partnership’ on Monday.

The Indian economy, which expanded by 8.5% in 2010-11, is likely to expand at the same rate in the current fiscal as well.

Finance minister Pranab Mukherjee is leading a high-level delegation here to promote India as an attractive investment destination.

Basu further said a 1% increase in the country’s GDP would create an additional one million jobs and India was committed to maintaining the growth momentum.

While India’s economic fundamentals are strong, continuous high inflation is seen as a big constraint to its growth.

At the conference, Reserve Bank of India (RBI) deputy governor Subir Gokarn said that supply side pressures on inflation may moderate the growth momentum in the short run.

“Inflation is a significant near-term macro challenge and growth would be impacted in the short-term in managing inflation and inflationary expectations," he said.

Besides supply side constraints, high global commodity prices, including food and fuel, are adding up to the inflationary pressures.

Last week, the government raised retail prices of politically sensitive diesel, LPG and kerosene, in the wake of high crude oil prices in global markets.