The National Statistical Office said the estimated annual per capita (net national income) at current prices for 2022-23 stands at Rs 1,72,000. This marks a growth of around 99 per cent from Rs 86,647 in 2014-15.But does that mean all Indians are now richer? Here's all you need to know.
India's per capita income may have doubled, but rising income inequality remains a major concern. (Photo: Reuters)
India’s per capita income has doubled under the BJP-led NDA government that came to power in 2014-15, highlighting the strong economic growth over the years. But increased per capita income does not mean all citizens in the country have gotten richer.
The National Statistical Office said the estimated annual per capita (net national income) at current prices for 2022-23 stands at Rs 1,72,000. This marks a growth of around 99 per cent from Rs 86,647 in 2014-15.
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Per capita income masks rising income inequality
Although per capita income has increased in India, it does not provide a complete picture of how that wealth is distributed across India’s vast population of over 1.4 billion people.
Per capita income refers to the average income of each person in a country, and it is calculated by dividing the total income of the entire population. Since total income is taken into consideration, it includes the wealth of people from multiple income groups.
So, even if the per capita income of a population increases, there are chances that the entire population won’t see a massive income gain, especially in a country with a large population like India.
Rich Indians boost per capita income
Multiple research reports, including this one from Oxfam, suggest that the wealth of India’s super rich has increased rapidly over the past few years, while the wealth of poor and middle-income Indians fell during the two years of the pandemic.
Moreover, a majority of India’s population struggles with poverty, which has increased due to the impact of the pandemic and sustained levels of high inflation.
Another important point to note is that per capita income does not take into account income inequality. For instance, a country like India may have a high per capita income, but income distribution is concentrated with barely 10 per cent of the total population.
This means the majority of the population does not get richer even if there is strong economic growth and subsequent increase in per capita income.
Simply put, per capita income is just an indicator to measure economic growth and development, but it does not give an accurate representation of the income of all citizens. On the contrary, it masks the rising income inequality in India.
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Published By:
Koustav Das
Published On:
Mar 6, 2023
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