Five Indian states have achieved income levels that place them in the World Bank’s upper-middle-income category based on per capita income, even as India continues to remain classified as a lower-middle-income economy, according to a report by Moneycontrol based on an analysis of World Bank classifications and state income data.
The World Bank recently upgraded countries such as Sri Lanka, Vietnam and the Philippines to higher income categories following improvements in income levels.
India, however, remains a lower-middle-income country with an Atlas-method per capita income of $2,760, which is only slightly above the lower-middle-income average of $2,488 and below the upper-middle-income benchmark of $4,636.
According to the World Bank classification, economies with per capita income below $1,175 fall under the low-income category, while those between $1,175 and $4,635 are considered lower-middle-income economies. Countries with income above $14,375 are classified as high-income economies.
Within India, Delhi has the highest per capita income at $6,217, followed by Karnataka at $5,579, Telangana at $5,407, Tamil Nadu at $5,329 and Gujarat at $4,734. These five states have exceeded the World Bank’s upper-middle-income threshold.
Several other major states came close to the benchmark. Maharashtra recorded a per capita income of $4,628, only $8 below the cutoff, while Haryana stood at $4,627 and Kerala at $4,610.
In contrast, Bihar remained the poorest major state with a per capita income of $984.
Uttar Pradesh and Jharkhand followed with incomes of $1,403 and $1,470, respectively. The three states have income levels lower than countries such as Nepal and several sub-Saharan African nations.
The analysis also highlights the economic transformation of Indian states over the past three decades.
In 1994, none of India’s major states had incomes qualifying them as middle-income economies under current World Bank standards.
Today, several states have reached income levels comparable with countries such as South Africa, Fiji and Mongolia.
Middle-income states recorded the fastest growth since 1994-95, increasing 36.7 times, compared with 28.3 times for the richest states and 26.6 times for the lowest-income group.
States such as Karnataka, Kerala, Andhra Pradesh and Tamil Nadu drove this expansion, while Bihar, Uttar Pradesh and Jharkhand continued to trail behind.
Regional shifts have also altered the economic ranking of states. Odisha, which had a similar income level to Uttar Pradesh three decades ago, now earns 75% more. Assam has also moved ahead of Jharkhand, with per capita income 48% higher.
Punjab, once India’s richest major state in 1994-95, now ranks below several states, reflecting changing patterns of economic growth across the country.
