Datanomics: Population burden limits India's economic growth gains

The gap between the GDP and individual prosperity is striking, especially when compared with other major economies

India is on the verge of becoming a $4 trillion economy. In doing so, it is set to overtake Japan in terms of gross domestic product (GDP), becoming the world’s fourth-largest economy. However, beneath this milestone lies a deeper concern: While India as a nation grows richer, its average citizen remains far behind in terms of income — even if it were distributed equally. The gap between GDP and individual prosperity is striking, especially when compared with other major economies. A key factor is India’s population — now the largest in the world after surpassing China, according to the UN Population Fund.

 

Global leaderboard (Economies with $4 trn GDP) 

 

When the US hit the $4 trillion GDP mark in 1984, its per capita income exceeded $17,000, ranking it among the world’s top three. Japan followed in 1993 with over $36,000 per capita; China crossed the threshold in 2008 with just $3,500 per capita, ranking 112th. India’s contrast is sharper. As it approaches the $4 trillion milestone in FY26, its per capita income is projected at just $2,878 — placing it 140th out of 189 nations

 

Inching up the ladder 

 

*IMF projections Note: Data according to financial years (April-March)

Source: IMF; rankings compiled by BS

 

 

Between 2015 and 2025, India’s global ranking in per capita income has improved only marginally, from 153rd to 140th. While this reflects some economic progress, the country remains in the lower tier globally in terms of average income per person