Lok Sabha Question No. 2137 (UNSTARRED), answered on 2019-12-02
Subject: World  Bank’s Classification of Countries by Income Levels
Ministry: FINANCE
Asked by: Jayadev Galla

## GOVERNMENT  OF INDIA MINISTRY OF FINANCE DEPARTMENT  OF ECONOMIC  AFFAIRS

## LOK SABHA

UNSTARRED  QUESTION  NO. 2137 TO BE ANSWERED ON MONDAY,  DECEMBER 2, 2019/ AGRAHAYANA  11, 1941

(SAKA)

.WORLD  BANK'S CLASSIFICATION OF COUNTRIES  BY INCOME LEVELS'

## 2137. SHRI JAYADEV GALLA:

## Will the Minister of FINANCE  be pleased  to state:

- (a) whether  the World Bank's classification  of countries  by income levels released in July this year has placed lndia in the category  of 'Lower Middle  lncome Countries' along with Pakistan, Bangladesh,  Guatemala,  Zambia, etc., based on the Gross National lncome per capita calculation  used by Atlas Method;
- (b) if so, the reasons  therefor  and the reaction of the Government  in this regard;
- (c) whether  it is true that among BRICS, lndia is the only country which is in the lower middle  income group  and if so, the details thereof;
- (d) the details of its likely impact on the lending rates and terms by World Bank and other international  financial institutions  which  lend money to lndia; and
- (e) the steps taken/proposed  to be taken to better lndia's ranking?

## ANSWER MINISTER  OF STATE IN THE MINISTRY  OF FINANCE (sHRl ANURAG SINGH THAKUR)

(a) to (e): Yes, lndia has been classified as a'Lower Middle lncome Country' based on World Bank's income classification  of countries  released  in July 2019 based on GNI per capita along with Pakistan, Bangladesh,  Zambia and such other countries  but Guatemala  is classified  as an 'Upper Middle lncome Country'. The World Bank classifies  the world's economies  into four income  groups: high, upper-middle,  lowermiddle, and low. For the current  2020 fiscal  year, low-income  economies are defined as those with a GNI per capita, calculated  using the World Bank Atlas method,  of USD

1,025 or less in 2018; lower middle-income  economies are those with a GNI per capita between USD 1,026 and USD 3,995; upper middle-income  economies are those with a GNI per capita between USD 3,996 and USD 12,375; high-income  economies are those with a GNI per capita of USD 12,376 or more. Because of consistent  efforts of the Government, the GNI per capita has been increasing  over the years from USD 1 120 in 2009 to USD 2020 in 2018. The Gross National lncome per capita as perWorld  Bank Atlas method  for Brazil,  China,  Russia and South Africa for Financial  Year 2018 are USD 9,140, USD 9,470, USD 10,230 and USD 5,750 respectively.  lndia is currently eligible  for IBRD lending and falls in the lowest  pricing group (Group A) of countries and thus there is currently no impact on lending rates from the World Bank and other institutions  based on this income  classification.  The government  has been taking all necessary measures to increase GNI per capita. These include introduction of lnsolvency  and Bankruptcy Code (lBC), implementation of Goods and Services Tax, Make-in-lndia programme,  and continuous  liberalization to boost inflows of FDl, reduction  in corporate  tax rates and a boost to infrastructure  development.