India may be the fastest growing major economybut it will take 75 years for its per capita income to reach a quarter of U.S. income levels if current trends continue, the World Bank warned on Thursday, identifying it as one of 100-odd countries including China that face the risk of falling into the “middle income trap”.

The World Bank makes a reference to Prime Minister Narendra Modi’s vision to turn India into a developed economy by 2047, “the centennial of independence” in its ‘World Development Report 2024’. While governments in India and other nations hope to accomplish the transition from a middle-income economy, like Korea had done, the multilateral lender said “it would be fair to conclude that it would be a miracle if today’s middle-income economies manage to do in 50 years what Korea did in just 25.”

Noting that many middle-income countries still use a playbook from the last century, relying mainly on policies designed to expand investment, World Bank group chief economist Indermit Gill posited that was like “driving a car just in first gear and trying to make it go faster”.

“If they stick with the old playbook, most developing countries will lose the race to create reasonably prosperous societies by the middle of this century. At current trends, it will take China more than 10 years just to reach one-quarter of U.S. income per capita, Indonesia nearly 70 years, and India 75 years,” Mr. Gill, who is also the Bank’s senior vice president for development economics, cautioned.

Nations such as China, India, Brazil, and South Africa face serious obstacles in their efforts to become high-income countries in the next few decades, reckoned the World Bank in its study on trends from the past 50 years, concluding that countries growing wealthier usually hit a “trap” at about 10% of annual U.S. GDP per person. This is currently the equivalent of $8,000 today, or the middle of the range of what the Bank classifies as “middle-income” countries.

Since 1990, only 34 middle-income economies have managed to shift to high-income status, with over a third of them benefiting from integration into the European Union or previously undiscovered oil reserves.

By 2023, 108 countries were classified as middle-income, each with annual GDP per capita in the range of $1,136 to $13,845. Home to six billion people or 75% of the global population, with two out of every three persons living in extreme poverty, these countries generate more than 40% of global GDP.

“The battle for global economic prosperity will largely be won or lost in middle-income countries. But too many of these countries rely on outmoded strategies to become advanced economies. They depend just on investment for too long — or they switch prematurely to innovation,” Mr. Gill said.

Emphasising that the road ahead poses even stiffer challenges for such countries such as rapidly ageing populations, burgeoning debt, geopolitical and trade frictions, and the difficulty of expediting economic progress without fouling the environment, Mr. Gill mooted a fresh approach to escape the ‘middle-income trap’.

“First focus on investment; then add an emphasis on infusion of new technologies from abroad; and, finally, adopt a three-pronged strategy that balances investment, infusion, and innovation. With growing demographic, ecological and geopolitical pressures, there is no room for error,” he underlined.