India's per capita income doubled since Modi became PM, says data

Despite the indicative healthy growth in average income of people, the increase in real income does not look very impressive

India’s per capita income in nominal terms, or without making adjustments for inflation, almost doubled to Rs 1.72 lakh in 2022-23 as compared to Rs 86,647 in 2014-15, the year when the government led by Prime Minister Narendra Modi came to power, as per the official data.

While the comparison of current price data indicates a healthy growth in average income of the people in India, the increase in real income does not look very impressive.

As per the second advance estimates of national income and expenditure released by the National Statistical Office (NSO) recently, the per capita net national income at constant 2011-12 prices is projected to increase to Rs 98,118 in 2022-23 as compared to Rs 72,805 in 2014-15 showing an increase of around 35 per cent.

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“The growth in nominal per capita or GDP does not tell much. You have to look at the increase in real income, and distribution of income,” said Jayati Ghosh, noted economist and former professor at JNU.

As per the NSO data, the per capita net national income at current prices is estimated to jump by 16.2 per cent in 2021-22 and 14.4 per cent in 2022-23 on a year-on-year basis. This data looks impressive.

However, after making adjustments for inflation the real increase in per capita net national income during 2021-22 comes out at 7.6 per cent, which is 8.6 percentage points lower when compared with the current price data. Similarly for 2022-23, the real increase in per capita net national income is pegged at 6 per cent, which is less than half of the 14.4 per cent nominal figure.

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“Around 35 per cent increase in 8 years, it’s not a great performance. The annual average comes out around 4 per cent,” said C.P. Chandrasekhar, former professor, Centre for Economic Studies & Planning, Jawaharlal Nehru University (JNU).

Referring to Oxfam and Credit Suisse reports on wealth inequality, Chandrasekhar noted that the gaps between rich and poor have increased.

“Per capita income does not tell anything about distribution. The average might look good, even if the income of just three people jumped,” he added.

As per Oxfam’s latest report, the top 5 per cent of the population in India own more than 62 per cent of the country’s wealth.

There are 119 billionaires in India. Their number has increased from only 9 in 2000 to 101 in 2017. Between 2018 and 2022, India is estimated to produce 70 new millionaires every day. Billionaires' fortunes increased by almost 10 times over a decade.

“The average masks the inequality,” said Nagesh Kumar, Director, Institute for Studies in Industrial Development (ISID).