Indermit Gill, the chief economist of the World Bank, who is also the author of the middle income trap concept, has said, “The odds are against India becoming a high income developed country.” Gill says the majority of middle income countries remain middle income countries. In India’s case, he believes it will easily progress from its present per capita income of $2,500 to levels of $8,000-$10,000 but then it could get stuck. Up till now, no country of India’s size or demography has progressed from middle income status to high income developed country status.
In a comprehensive and detailed interview to Karan Thapar for The Wire, Gill, who is also the World Bank’s senior vice president for development economics, said if India gets stuck in a middle income trap it would be “pretty good” for some 400 million people i.e. the rich and the middle and upper middle classes but, he added, “it won’t be good at all” for the remaining 1 billion Indians.
In the interview, Gill identified three critical steps that need to be taken if India is to avoid the danger of getting stuck in a middle income trap.
