RBI Deputy Governor Poonam Gupta announced that India's economic growth is becoming increasingly broad-based, with lagging states actively catching up to their more prosperous counterparts. Speaking at the Columbia Indian Economy Summit 2026, Gupta highlighted a significant narrowing of the growth gap that had persisted for decades, leading to greater equality in well-being across the nation.
Accelerated Growth and Macroeconomic Stability
Gupta detailed India's robust economic acceleration over the past four decades, with average real GDP growth climbing from 5.7 percent in the 1980s to 7.7 percent in the most recent four-year period. This surge is reflected in per capita income, which dramatically increased from approximately $274 in 1981 to nearly $2,700 in 2024, with projections indicating further rises to $4,346 by 2030, according to IMF forecasts.
India has entered what Gupta described as a “virtuous cycle” of rapid growth combined with macroeconomic stability. This stability is underpinned by reduced inflation volatility, a manageable current account deficit, strengthened bank balance sheets, and improved fiscal discipline. Key reforms such as the Fiscal Responsibility and Budget Management (FRBM) framework, the Goods and Services Tax (GST), and the flexible inflation-targeting regime introduced in 2016 were credited as instrumental drivers of this positive trend.
Convergence in Welfare Indicators
While historically richer states grew faster, Gupta noted that this pattern has weakened over the last decade. Every Indian state has seen a substantial rise in per capita gross state domestic product (GSDP) over the past two decades. States like Odisha, Assam, and Uttar Pradesh were specifically cited for their improved performance, contributing to the overall narrowing of the growth disparity.
More strikingly, Gupta emphasized a visible convergence in welfare indicators. Metrics spanning health, education, demography, physical infrastructure, and access to essential services like electricity, safe drinking water, sanitation, and clean cooking fuel are trending towards greater parity across states. Financial inclusion for women, for instance, soared from 14 percent in 2005-06 to around 80 percent by 2019-21. Child nutrition and infant survival rates have also steadily improved.
Persistent Divergences and Future Outlook
Despite these positive trends, Gupta cautioned that certain structural growth drivers still exhibit divergence. Areas such as industrial productivity, capital formation, foreign direct investment inflows, bank credit growth, and the shift away from agriculture continue to show disparities among states.
Looking ahead, Gupta projected that if current growth trajectories are maintained, India's average state per capita income could approach high-income thresholds by 2046-47. She outlined distinct strategies for different states: richer states should prioritize innovation, urbanization, talent attraction, and global competitiveness, while poorer states need to focus on agricultural productivity, labor-intensive industries, skill development, and building fiscal capacity.
Gupta concluded by stressing the critical role of states in leveraging their policy powers effectively, especially in areas like land, labor, education, healthcare, and governance. A holistic framework that strengthens both central macroeconomic levers and state-level reforms will be vital to accelerate prosperity across all states and, consequently, for India as a whole.