India's per capita income is projected to increase significantly over the next few decades.

According to a study conducted by SBI Research economists, India's per capita income is estimated to grow 7.5 times from Rs 2 lakh ($2,500) in FY23 to Rs 14.9 lakh ($12,400) per annum by FY47.

The Indian government has set an ambitious target to become a developed economy by FY47.

Prime Minister Narendra Modi emphasised this goal in his Independence Day address ahead of the 2024 Lok Sabha elections, stating that the next five years are crucial for India to achieve its 2047 objective.

PM Modi said that the vision of a developed India in 2047 is not merely a dream but a resolution shared by the 140 crore Indians.

The SBI study highlights the potential for significant income growth in the coming years.

It predicts that the weighted mean income of tax filers will rise to Rs 49.9 lakh in FY47, compared to Rs 13 lakh in FY22.

This increase is attributed to the country's transition from a lower-income group to an upper-income group economy, as well as tax buoyancy.

The study also notes that the formalisation of the economy through initiatives such as the Goods and Services Tax and the UDYAM portal for MSMEs has contributed to a rise in income tax returns.

The number of tax filers has seen a significant increase from 2.1 million in FY13 to 85 million in FY23.

According to SBI economists, this number of tax filers is projected to reach 482 million by FY47, resulting in a rise in the proportion of taxable workforce from 22.4 per cent in FY23 to 85.3 per cent in FY47.

Additionally, there is expected to be a 25 per cent decrease in the number of individuals filing zero tax returns by FY47, as many of them move up to the next income group.

Over the period between FY11 and FY22, there has been a notable shift in income brackets, with 13.6 per cent of individuals having moved out of the lowest income group (below Rs 5 lakh), and 8.1 per cent joining the Rs 5-10 lakh group and 3.8 per cent entering the Rs 10-20 lakh bracket.

The study also highlights a decline in the number of tax filers with no tax liability.

Furthermore, it noted that five states—Maharashtra, Uttar Pradesh, Gujarat, Rajasthan, and West Bengal—account for nearly half of all tax returns filed by FY22.

The benefits of migration were highlighted in the study, which found that migrating populations contributed 0.5-2.5 per cent of the Gross State Domestic Product (GSDP) in various states, with six states benefitting from net positive migration.

According to economists from the State Bank of India (SBI), the benefits of migration far outweigh any negative impact on select states' GSDP.

“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, reports Economic Times.

To fully comprehend the advantages of migration, the study suggested capturing the place of work as a distinct category in income tax filing.