India's Per Capita Income Likely To Rise 7 Times To Rs 15 Lakh By 2047, Says SBI Report

Assuming an annual inflation rate of 5 per cent, which is the average of the past 10 years' inflation rates, the real value of today’s Rs 14.9 lakh will be around Rs 4 lakh in 2047

On the income tax return data, the report says that the percentage of I-T filers in the total taxable workforce is projected to grow by 3.8 times. ( Image Source :Getty )

Per capita income in India is estimated to reach from Rs 2 lakh in FY23 to Rs 14.9 lakh in FY47, which is over seven times, when the country will be celebrating its 100th Independence Day, according to an SBI Research report. SBI’s report on 'The Ascent of the new Middle Class in circular migration' was released on the 77th Independence Day on Tuesday. It forecasts that the per capita income will go up from the current Rs 2 lakh to Rs14.9 lakh.

According to the report projects a rise in the nominal income, and doesn't account for the inflation from 2023 to 2047. The sum of Rs 14.9 lakh won't have the same value 24 years later as it does today. However, the rise in per capita income, accounting for inflation, will be just two times. Assuming an annual inflation rate of 5 per cent, which is the average of the past 10 years' inflation rates, the real value of today’s Rs 14.9 lakh will be around Rs 4 lakh in 2047.

India's per capita income currently is among the lowest in the lower middle income countries, even less than that of countries like Bangladesh. The report also makes several projections on the rise in India's workforce and taxpayers. It says that the number of Indians who file taxes will go up nearly seven times, from 7 crore in FY23 to 48.2 crore in FY47. The SBI report says that 13.6 per cent of income tax filers left the lowest income strata from 2012-23, and 25 per cent are likely to leave by 2047. The report says around 17.5 per cent of filers are expected to move up to the Rs 5 lakh-Rs 10 lakh income group, 5 per cent to the Rs 10 lakh-Rs 20 lakh group and 3 per cent to the Rs 20 lakh-Rs 50 lakh income group.

The report states, “Middle Income Economy cohort is going forward as the tax filer base, helped by ongoing reforms and confidence-building measures coupled with a galvanising economy firing on all cylinders promises to bring to the net 482 million IT filers in FY47, The formalisation drive of nearly 70 million MSMEs promises to broad base the cohort suitably.”

While overall per capita income will grow to 14.9 lakhs, the annual weighted mean income (calculated by giving different weights to some of the individual values) of income tax filers will go up by less than 4 times - from Rs 13 lakh in FY23 to Rs 49.7 lakh in FY47, the SBI says.

On the income tax return data, the report says that the percentage of I-T filers in the total taxable workforce is projected to grow by 3.8 times. In 2023, only 22.4 per cent of the total workforce with a taxable income filed income tax returns. In 2047, this is projected to go up to 85.3 per cent. The number of people with a taxable income is also projected to grow by 80 per cent by 2047. In FY23, 31.3 crore people (59 per cent of the total workforce) have a taxable income and this number is expected to grow to 56.5 crore.

India's workforce is also projected to grow by 37 per cent. In FY23, the country’s workforce has 53 crore people (38 per cent of population), and this is projected to grow to 72.5 crore (45 per cent of the population in 2047). It says that just five states - Maharashtra, Uttar Pradesh, Gujarat, Rajasthan, and West Bengal - account for 48 per cent of the total income tax returns filed. In FY23, 68.5 million people filed income tax returns, with 64 per cent of the population still in the income group of up to Rs5 lakhs.