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India needs 8 percent growth for 30 years to join middle-income group: World Bank

Reuters  |  NEW DELHI 

By Kumar

NEW DELHI (Reuters) - India's economy needs to grow 8 percent and higher a year for the next three decades to join the ranks of middle-income countries, which would require major reforms in the land, labour and financial sectors, the said on Wednesday.

If that did happen, it would raise the income of at least 50 percent of India's 1.3 billion people to sustain consumption expenditure of $10 a day based on the purchasing power parity of the global middle class.

The government estimates India's per capita income could touch 86,689 rupees ($1,337.4), or $3.7 a day, in the current fiscal year ending this month.

Asia's third-largest economy, which grew at a rapid pace of 8.8 percent a year from 2004 to 2008, is expected to grow 6.7 percent this financial year, said Junaid Ahmad, of the while releasing a report.

He said the planned to lend $20 billion to $25 billion to in the next five years, mainly for investment in infrastructure, human resources and natural resources management, to support inclusive economic growth.

"India's long-term growth has become steady, stable, diversified and resilient," Ahmad said adding it now needed to undertake reforms for efficient use of scarce land, water and financial resources to achieve higher growth.

The world's seventh-largest economy needs to accelerate growth to create jobs for a million young people joining the labour force every month.

Narendra Modi, who faces a next year, has pushed up spending on and jobs-creating sectors to bolster his popularity.

Last November, jumped into 100th place on the World Bank's ranking of countries by Ease of Doing Business, for the first time, up about 30 places, driven by reforms in access to credit, power supplies and protection of minority investors.

The projected the $2.5 trillion economy could grow at 7.3 percent and 7.5 percent in the next two years, helped by tax reforms and benign global growth.

needs to push land, labour and financial sector reforms and improve competitiveness of exports to achieve higher growth, Poonam Gupta, of the report said.

Referring to the slowdown in credit following a surge in bad loans in banks, estimated at nearly $150 billion, the suggested consolidation of and more space for

"Durable revival in private investments and growth would be crucial for India," Gupta said.

"The hard-earned fiscal discipline must be protected."

($1 = 64.8200 Indian rupees)

(Reporting by Kumar; Editing by Sanjeev Miglani and Robert Birsel)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, March 14 2018. 21:30 IST