Economics · Economic Growth and Development
The middle-income trap is a theoretical economic development situation where a country that attains a certain income gets stuck at that level. Considering India's current transition, which of the following represents the most critical barrier to India moving from a lower-middle-income to a high-income economy by 2047?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The implementation of the Goods and Services Tax which has made internal trade between states impossible due to varying tax rates.
- 2A total lack of digital infrastructure that prevents the use of mobile banking and e-commerce in urban cities.
- 3The low female labor force participation rate and inadequate investment in research and development compared to global benchmarks.✓
- 4The excessive growth of the agricultural sector which is diverting all high-tech talent back to rural farming.
Correct answer
The low female labor force participation rate and inadequate investment in research and development compared to global benchmarks.
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