India's Per Capita Income doubles since 2014-15 [UPSC Current Affairs]

As per the National Statistical Office, India’s per capita income in nominal terms, as of March 2023, has doubled to Rs. 172000 in comparison to the year 2014-15. Know more about this important development in this article for the IAS exam Indian economy segment.

India’s Per Capita Income Doubles

As per the National Statistical Office (NSO), the per capita income (net national income) at current prices has increased from Rs. 86647 in 2014-15 to Rs. 172000 in 2022-23, which is an approximate increase of 99%.

• In the same period in real terms (at constant prices), annual per capita income increased by approximately 35% to Rs. 98118.
• During the Covid period, both in real and nominal terms, per capita income dipped. However, it picked up momentum in 2021-22 and 2022-23.
• Based on the World Development Indicator database, for the period from 2014 to 2019, in real terms average growth of India’s per capita income was 5.6% per annum.
• Worrying aspects:
  • Uneven income distribution: Most of this increase has been accrued by the top 10% of the population. This also means that the income of the people at the lower end of the income ladder might not be changing that much.
  • The presence of high levels of inflation and falling median wages are causes of concern.

Additional Information:

• Per Capita Income: It is an indicator of economic development. It is the income earned by each person in the economy. It is calculated by dividing the country’s national income by its population.
  • Per capita income is used to determine the average per-person income for an area and to evaluate the standard of living and quality of life of the population.
• Nominal national income (or national income at current prices) is the national income calculated at current prices and if this is used to calculate per capita income, that will be termed as per capita income in nominal terms. It will have an inflationary impact on its values.
• If the national income is calculated at base year price levels, then it will be termed as real national income (or national income at constant prices) and the corresponding per capita income is known as per capita income in real terms. This figure eliminates the effect of inflation.

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