India’s per capita income doubles in 8 years, but gains elude majority Indians
- IBJ Bureau
- Mar 06, 2023
India’s per capita income in nominal terms has doubled to Rs 1,72,000 since 2014-15 when the Narendra Modi-led NDA came to power. But uneven distribution of income remains a challenge. According to the National Statistical Office (NSO), the annual per capita (net national income) at current prices is estimated at Rs 1,72,000 in 2022-23, up from Rs 86,647 in 2014-15, suggesting an increase of about 99 per cent.
In real terms (constant prices – excluding inflation), the per capita income has increased by about 35 per cent from Rs 72,805 in 2014-15 to Rs 98,118 in 2022-23.
“You are looking at GDP in current prices, but if you account for inflation, the increase is much less,” notes development economist Jayati Ghosh on doubling of per capita income in nominal terms.
She further points out that distribution is critical. “Most of this increase has accrued to the top 10 per cent of the population. By contrast, median wages are falling and possibly even lower in real terms,” adds the former JNU professor.
According to the NSO data, the per capita income dipped during the COVID period, both in real and nominal terms. However, it has picked up in 2021-22 and 2022-23.
Pinaki Chakraborty, a former director of premier economic research institute NIPFP, opines that according to the World Development Indicator data base, average growth of India’s per capita income in real term for the period from 2014 to 2019 has been 5.6 per cent per annum.
“This growth is significant. We have seen improvements in outcome related to health, education and economic and social mobility. COVID impacted us badly. However, we have seen significant economic recovery after COVID,” he notes.
“Sustaining per capita income growth at 5 to 6 per cent per annum with appropriate redistributive policies will help sustain this momentum. We also have to factor in unevenness in growth within the country. Balanced regional development will act as a catalyst for higher growth,” he adds.