India's per capita income grew faster before 2014-15, shows data

The latest numbers available are for 2021; income grew at 21.3 per cent between 2015 and 2021 in India

The average Indian’s income has nearly doubled since 2014-15, but this growth is lower than seen in earlier years.

The per capita net national income, broadly a measure of what an average person in India earns, was Rs 86,647 in 2014-15. This has since risen to Rs 172,000, according to the latest government data. Reports on Monday pointed out that this represents nearly a doubling of income during the eight-year period.

The growth of 98.5 per cent is actually lower than the 157 per cent growth seen during the eight years leading up to 2014-15. The per capita net national income rose from Rs 33,717 in 2006-07 to Rs 86,647 in 2014-15.

These are current values, which means they are not adjusted for inflation. The inflation-adjusted growth, or growth at constant prices, is 35 per cent between 2014-15 and 2022-23. This is lower than the 42 per cent growth during an equivalent period ending in 2014-15.

The pandemic might have played a role. Growth was higher at 48 per cent before the pandemic for an equivalent eight-year period ending in 2018-19. But this is not the highest growth rate that India has seen. The peak rolling eight-year growth rate since 2000 was 54 per cent for the eight-year period ending in 2010-11.

India’s growth rate has outpaced much of its peers. An international comparison has been done using per capita gross national income on a purchasing power parity basis (data in constant 2017 international dollars). The latest numbers available are for 2021; income grew at 21.3 per cent between 2015 and 2021 in the country.

It was slightly faster, at 22.4 per cent, between 2015 and 2019 before the pandemic struck.

This pace gave it faster growth rate than other lower middle income countries. The World Bank defines a lower middle-income economy as one where per capita gross national income (GNI), or the amount earned per person in a year, was between $1,086 and $4,255 in 2021. Others in the list of lower middle income countries include Vietnam, Bangladesh, Sri Lanka and Indonesia.

It also grew faster than Russia, South Africa and Brazil. China grew the fastest. China’s income grew 26.9 per cent between 2015 and 2019; and 39 per cent between 2015 and 2021.

Data from World Bank shows that India’s gross national income (GNI) per capita based on purchasing power parity at 2017 constant prices was $6,488.91 in 2021, it was less than half of China’s per capita income of $17,443.96.