Industry Odisha Bureau, Jul 16: The World Bank (WB) has reportedly upgraded Sri Lanka, Vietnam, the Philippines and Jordan from the lower-middle-income (LMI) to the upper-middle-income (UMI) category based on their per capita Gross National Income (GNI), while India still reportedly remains in the LMI category despite being world’s fastest-growing major economy.
Citing the key reason behind such a decision taken by the World Bank, financial experts and economists have reportedly argued that, “India’s per capita GNI currently stands at $2,760, well below the World Bank’s upper-middle-income threshold of $4,496 in comparison with Sri Lanka’s $4,670, Vietnam’s $4,970, that of Philippines’ $4,850 and that of Jordan’s $5,260.”
The financial experts and economists have further reportedly argued that, “India’s economy despite being nearly eight times larger than Vietnam’s, India’s much larger population means overall economic growth translates into lower income gains per person”.
The World Bank report has reportedly highlighted that, “India still needs higher productivity, more quality jobs, faster manufacturing expansion, greater investment, and stronger export growth even though it has a steady gross domestic product (GDP) growth, rising per capita incomes, and a large demographic dividend. Aggregate GDP growth alone will not be enough to significantly raise average incomes.”
The World Bank report has also reportedly underlined that, “India needs to attain sustained productivity growth/Total Factor Productivity (TFP), higher investment, large-scale job creation, better quality employment, and faster income growth across the population.”
Notably, “Total Factor Productivity (TFP) is a key economic measure that evaluates the efficiency with which inputs like labour and capital are used to produce output in an economy, firm, or industry. It represents the portion of output growth that cannot be explained solely by increases in input quantities, capturing improvements in technology, management, and overall operational efficiency.”
