India’s per capita income is set to increase 7.5 times to Rs 14.9 lakh ($12,400) per annum by FY47 from Rs 2 lakh ($2,500) in FY23, according to the latest study published by SBI Research economists on Tuesday.
The government has set a target of FY47 to become a developed economy. Prime Minister Narendra Modi, in his last Independence Day address, before the 2024 general elections, said that the next five years are important for India to achieve its 2047 goal.
“A developed India in 2047 is not just a dream, but the resolution of 140 crore Indians,” PM Modi stated.
The SBI study claims that the weighted mean income of tax filers will increase to Rs 49.9 lakh in FY47, from Rs 13 lakh in FY22, owing to the transition to an upper-income group economy from a lower-income group and tax buoyancy. It also noted that an increase in formalisation owing to Goods and Services Tax and UDYAM portal for MSMEs was propelling income tax returns.
The number of tax filers increased to 85 million in FY23 compared with 2.1 million in FY13. SBI economists note that the number is further expected to increase to 482 million by FY47, increasing the share of the taxable workforce to 85.3% from 22.4% in FY23.
It noted that the number of people set to file zero tax returns would also decline by another 25% by FY47, with most shifting to the next income group.
Between FY11 and FY22, 13.6% of people moved from the lowest income strata of below Rs 5 lakh, with 8.1% added to the Rs 5-10 lakh group and 3.8% in Rs 10-20 lakh bracket.
The study further pointed to a decline in the number of tax filers with zero tax liability and noted that five states, namely, Maharashtra, Uttar Pradesh, Gujarat, Rajasthan and West Bengal, accounted for nearly half of the total returns filed by FY22.
The study also extolled the benefits of migration, noting that migrating population contributed 0.5-2.5% of GSDP in individual states, with six states benefitting from net positive migration.
“We believe the positives of the migration through collaborative pitching of the idea of federalism and redistribution of efficient skilling far outweighs the loss in select states’ GSDP (plus, the remittance remuneration),” SBI economists stated.
The study called for capturing the place of work as a separate category in income tax filing to understand the benefits of migration.
