Living standards to see steepest rise in coming decades amid efforts to double per capital income: FM

New Delhi: Highlighting that India is well on track to double its per capita income within a few years, largely driven by economic and structural reforms implemented over the past decade, Union finance minister Nirmala Sitharaman said India is set to see a rise in its per capita income, with the figure expected to increase by $2,000 in the next five years.

“India’s critical economic performance in the recent decade was underscored by its leapfrog from the 10th to the fifth largest economy in a matter of five years. I expect these improvements to continue as the effects of the last ten years of economic and structural reforms manifest more thoroughly in the data in the coming years as the Covid shock fades from the economy,” she said while addressing the 3rd edition of Kautiliya Economic Conclave here in the capital.

The finance minister further said that while it took us 75 years to reach a per capita income of $2,730, as per IMF projections, it would take only five years to add another $2,000. The upcoming decades will see the steepest rise in living standards for the common man, truly making it a period-defining era for an Indian to live in,” she added.

On the banking sector, she also said that the soundness and resilience of India’s banking sector have been underpinned by a sustained policy focus on asset quality improvements, enhanced provisioning for bad loans, sustained capital adequacy, and a rise in profitability. “The NPA ratios are at a multiyear low, and banks now have efficient debt recovery mechanisms. Ensuring that the financial system stays healthy and the cycle lasts longer is another of our core policy priorities,” she said.

On the fiscal front, Ms Sitharaman is of the view that the government continues to uphold its commitment to reducing the fiscal deficit. “Aided by buoyant revenue generation, restrained revenue expenditure growth and healthy economic activity, the fiscal deficit is estimated to decline further from 5.6 percent of GDP in FY24 to 4.9 per cent in FY25. The commitment to fiscal discipline will not only help keep bond yields in check but will translate to lower economy-wide borrowing costs,” she said.

By 2047, as India crosses the 100-year mark of independence, she said, the new Indian era will have core characteristics similar to developed countries. “Viksit Bharat will usher prosperity not just to Indians but to the rest of the world by becoming central to a vibrant exchange of ideas, technology, and culture,” she added.