India’s per capita income likely to double by the end of the decade: N K Singh

Former bureaucrat N K Singh today said India’s per capita income is likely to double by the end of this decade as India remains the fastest growing major economy with a robust macroeconomic foundation and on course to become the third largest economy. Singh said GST reforms will boost consumption and facilitate ease of doing business.

“India’s average real growth for many decades was around 3.5% with population growing at just over 2%. Per capita income thus grew at just 1%,” Singh said at the Kautilya Economic Conclave, 2025 in New Delhi today.

“While our population growth rate has come down to below 1%, our nominal income growth has risen to above 6.5% per annum. Per capita income now grows at 6%. This implies a sixfold increase in per capita income growth. Given the power of compounding, this would mean the doubling of per capita income by the end of this decade,” Singh said.

“India remains the world’s fastest-growing major economy, with a robust macroeconomic foundation and on course to become the third largest. In April-June 2025, real GDP growth surged to 7.8%, surpassing expectations. Even after recalibration, the RBI expects a conservative estimate of GDP growth for FY 2025-26 to be 6.8%. These are not small achievements,” Singh said.

“Notwithstanding the uncertainties the deepening of the structural reforms process continues at a formidable pace. The far-reaching changes to the Goods and Services Tax, will enhance fiscal space, boost consumption, ameliorate ease of business, reinforce investor confidence, seek higher economic growth. It would be an important factor in mitigating the adverse effects of external factors,” he added.

“To achieve the common quest for a development, India would require real per capita GDP to grow at over 7.5%. First, how can we improve total factor productivity? Our ICOR which stood at 5 for a very long time, came down to 4.5 but unfortunately has hung there for very long,” he said emphasizing on the need to put strategies in place for improving the incremental capital output ratio.

“Second, notwithstanding external constraints and rising tariffs, trade must remain an engine of growth, entailing intensive search and diversification into new products, entry into fresh markets, and a strong push in high-value services exports,” said Singh.

“Third, Net FDI as a percentage of GDP continues at around 1%. Notwithstanding all measures to improve investor confidence, bringing this up to 3% could make enormous difference,” said Singh.

“Fourth, some analysts have argued that the new US visa restrictions are a blessing in disguise. If talented Indians return to India with embedded skills, then the need is to find creative ways to harness that skill as a boost to growth,” Singh added.