Boost Your Investment Strategy! Explore the Per Capita Income of Indian States

Understanding Per Capita Income

What is per capita income?

“Per Capita Income of Indian States” refers to the typical annual income of a region’s inhabitants. One year’s national income divided by population yields it.

Economists and policymakers use per capita income to evaluate a nation’s economy and living standards. Global per capita incomes compare countries’ prosperity. Economic productivity and living standards increase with per capita income.

Average per capita income growth indicates economic growth. Income distribution is not shown by per capita income. Median income and Gini coefficient give income inequality and living standards context. Per capita income is still a popular economic indicator. Read on to find out the highest Per Capita Income of Indian States.

History of Per Capita Income in India

India’s Glorious Past:

Our story begins with a prosperous India, a dominant player in global trade. Imagine bustling ports and thriving industries contributing to a flourishing economy.

The Colonial Downturn:

The arrival of the British, particularly after the Battle of Plassey, marked a turning point. India’s role shifted dramatically from a trading giant to a supplier of raw materials for British manufacture. Finished goods, produced by the Industrial Revolution, flooded the Indian market, further crippling domestic industries.

Economic Exploitation:

This wasn’t just trade, it was economic imperialism. The British levied heavy taxes on Indian exports, making them less competitive. Meanwhile, cheaper British goods flooded the market, hindering Indian production and leading to a significant wealth drain, as theorized by Dadabhai Naoroji, the “Grand Old Man of India.”

Early Calculations and Challenges:

Naoroji wasn’t alone in recognizing the economic plight. He, along with other prominent economists like VKRV Rao, R.C. Dutt, and William Digby, attempted to quantify the damage. They estimated India’s per capita income in the pre-independence era (around 1867-68) to be a meager Rs. 20.

Pre-Independence Efforts:

Despite the limitations, these economists paved the way. Even before independence, institutions like the Indian Statistical Institute emerged, laying the groundwork for improved data collection.

Post-Independence Progress:

With independence came a revolution in data collection. The quality and quantity of data improved significantly as more institutions became involved. Calculating per capita income became an annual exercise, with the figures playing a crucial role in national economic planning (Economic Survey and Union Budget).

Calculation of Per Capita Income of Indian States

Formula and Methodology to Calculate Per Capita Income of Indian States

​​Per capita income is a nation’s annual income divided by its people. National income is calculated using GDP. National income divided by population yields per capita income.

A 50-million-person country with a $100 billion GDP has per capita income:       

Per Capita Income = Total National Income/Total Population = $100 billion/50 million = $2,000

Components of National Income

 Here are the primary components:

1. GDP: The market value of all final goods and services produced in a country in a given period. Includes consumption, government purchases, investments, and net exports.
2. Net National Product (NNP): This is the GDP after subtracting depreciation. The term “depreciation” describes the deterioration of a country’s capital over time.
3. National Income (NI): The total money earned within a country. Payouts include wages, interest, rent, and profits. Take the NNP, subtract indirect taxes, and add subsidies.
4. Personal Income (PI): A country’s residents’ total income before taxes. It is the total income of all individuals or households in a given period.
5. Gross National Product (GNP): GDP plus net income from abroad – income from investments abroad minus domestic income by overseas residents.

Per Capita Income Data Analysis

Per Capita Income of India Previous Years Data

Year	Nominal GDP per capita ($) at Current Price	Nominal GDP per capita (₹) at Current Price	Nominal GDP per capita ($) at Constant Price	Nominal GDP per capita (₹) at Constant Price
2020	1,901	1,39,423	1,966	1,44,239
2019	2,101	1,54,273	2,152	1,57,912
2018	1,997	1,46,601	2,090	1,53,410
2017	1,981	1,45,313	1,982	1,45,313
2016	1,733	1,27,121	1,876	1,37,572
2015	1,606	1,17,640	1,752	1,28,512
2014	1,574	1,15,422	1,640	1,20,240
2013	1,450	1,06,350	1,545	1,13,295
2012	1,444	1,05,820	1,469	1,07,657
2011	1,458	1,06,742	1,410	1,03,330
2010	1,358	99,446	1,358	99,446

Per Capita Income of Indian States Based on Current Prices 2022-23

PER CAPITA INCOME BASED ON CURRENT PRICES (In Rs) As on 01.08.2023
S. No.	State\UT	2021-22	2022-23
1	Andhra Pradesh	1,92,587	2,19,518
2	Arunachal Pradesh	2,05,645	–
3	Assam	1,02,965	1,18,504
4	Bihar	47,498	54,111
5	Chhattisgarh	1,20,704	1,33,898
6	Goa	4,72,070	–
7	Gujarat	2,41,930	–
8	Haryana	2,64,835	2,96,685
9	Himachal Pradesh	2,01,271	2,22,227
10	Jharkhand	84,059	91,874
11	Karnataka	2,65,623	3,01,673
12	Kerala	2,33,855	–
13	Madhya Pradesh	1,21,594	1,40,583
14	Maharashtra	2,15,233	–
15	Manipur	91,560	–
16	Meghalaya	1,03,335	1,12,737
17	Mizoram	1,98,962	–
18	Nagaland	1,25,887	–
19	Odisha	1,28,181	1,49,902
20	Punjab	1,68,705	1,81,716
21	Rajasthan	1,35,962	1,56,149
22	Sikkim	4,63,509	5,19,964
23	Tamil Nadu	2,42,253	2,75,583
24	Telangana	2,70,839	3,12,398
25	Tripura	1,37,472	1,59,419
26	Uttar Pradesh	73,048	83,565
27	Uttarakhand	2,11,657	2,33,565
28	West Bengal	1,24,798	1,41,373
29	Andaman & Nicobar Islands	2,29,080	–
30	Chandigarh	3,33,932	–
31	Delhi	3,89,529	4,44,768
32	Jammu & Kashmir-UT	1,20,790	1,36,771
33	Puducherry	2,51,344	–

States with Slowest Per Capita Growth

Bihar, Punjab, and Jharkhand have the lowest per capita income growth in a decade. These states’ low per capita incomes indicate economic underdevelopment. The main causes are low industrialization, infrastructure, skill development, health and education underinvestment, and job creation. Slow per capita income growth worsens poverty and socioeconomic opportunities in these states. Skill India, private investments, job incentives, and public spending boost productivity and incomes. Economic growth drivers must be strategically strengthened to close the development gap.

Per Capita Income of Indian States Wise List

Here is the list of Highest Per Capita Income of Indian States Wise List:

Rank	State/Union Territory	NSDP Per Capita (₹)	NSDP Per Capita ($)
1	Goa	₹ 4,72,070	$ 6,215
2	Sikkim	₹ 4,63,509	$ 6,102
3	Delhi	₹ 3,89,529	$ 5,128
4	Chandigarh	₹ 3,33,932	$ 4,396
5	Telangana	₹ 2,70,839	$ 3,566
6	Karnataka	₹ 2,65,623	$ 3,497
7	Haryana	₹ 2,64,835	$ 3,487
8	Puducherry	₹ 2,51,344	$ 3,309
9	Tamil Nadu	₹ 2,42,253	$ 3,189
10	Gujarat	₹ 2,41,930	$ 3,185
11	Kerala	₹ 2,33,855	$ 3,079
12	Andaman and Nicobar Islands	₹ 2,29,080	$ 3,016
13	Maharashtra	₹ 2,15,233	$ 2,834
14	Uttarakhand	₹ 2,11,657	$ 2,786
15	Arunachal Pradesh	₹ 2,05,645	$ 2,707
16	Himachal Pradesh	₹ 2,01,271	$ 2,650
17	Mizoram	₹ 1,98,962	$ 2,619
18	Andhra Pradesh	₹ 1,92,587	$ 2,535
19	Punjab	₹ 1,68,705	$ 2,221
20	Tripura	₹ 1,37,472	$ 1,810
21	Rajasthan	₹ 1,35,962	$ 1,790
22	Odisha	₹ 1,28,181	$ 1,687
23	Nagaland	₹ 1,25,887	$ 1,657
24	West Bengal	₹ 1,24,798	$ 1,643
25	Madhya Pradesh	₹ 1,21,594	$ 1,601
26	Jammu and Kashmir	₹ 1,20,790	$ 1,590
27	Chhattisgarh	₹ 1,20,704	$ 1,589
28	Meghalaya	₹ 1,03,335	$ 1,360
29	Assam	₹ 1,02,965	$ 1,356
30	Manipur	₹ 91,560	$ 1,205
31	Jharkhand	₹ 84,059	$ 1,107
32	Uttar Pradesh	₹ 73,048	$ 962
33	Bihar	₹ 47,498	$ 625

Economic Analysis of Per Capita Income of Indian States

The growth rate of per capita income of India throughout the years

As per the latest provisional estimate published on 31st May 2023, India’s per capita Net National Income (NNI) at constant (2011-12) prices increased by 35.12 per cent from Rs. 72,805 in 2014-15 to Rs. 98,374 in 2022-23. Per capita income of India in rupees was around 170 thousand rupees in the financial year 2023.

The annual growth rate was 13.7 per cent as compared to the previous year. The India Financial Year wise Average Inflation Rate based on the All India Consumer Price Index and the growth in per capita income from 2014-15 to 2022-23 is given below:

CPI Base 2012=100		Growth rate of Per Capita NNI (In %)
Year	Inflation based on CPI	At Current Prices	At Constant (2011-12) Prices
2014-15	5.93	9.5	6.2
2015-16	4.91	9.4	6.7
2016-17	4.52	10.6	6.9
2017-18	3.59	9.9	5.5
2018-19	3.41	9.3	5.2
2019-20	4.77	5.1	2.5
2020-21	6.16	-4.0(2nd RE)	-8.9(2nd RE)
2021-22	5.51	16.9(1st RE)	7.6(1st RE)
2022-23	6.65	16.0(PE)	6.3(PE)

India’s GVA Breakdown: Sector Contributions (2018-19 to 2022-23)

Understanding Per Capita Income of Indian States & how India’s economy is structured is key for businesses and investors. This table reveals the contribution of various sectors to India’s Gross Value Added (GVA) at current prices, from 2018-19 to 2022-23.

S.No.	Economic Activity/Sector	2018-19 (%)	2019-20 (%)	2020-21 (%)	2021-22 (%)	2022-23 (%)
1	Agriculture, forestry and fishing	17.64	18.33	20.32	18.97	18.42
2	Mining and quarrying	2.20	1.94	1.74	2.00	2.36
3	Manufacturing	16.38	14.72	15.40	15.84	14.70
4	Electricity, Gas, Water supply & Other utility services	2.62	2.74	2.75	2.59	3.00
5	Construction	7.87	7.50	7.39	8.10	8.19
6	Trade, Hotels, Transport, Communication & Services related to Broadcasting	18.65	18.93	15.78	16.85	17.98
7	Financial, Real Estate & Professional Services	20.55	21.11	22.19	21.51	21.42
8	Public Administration, Defence& Other Services	14.10	14.74	14.43	14.13	13.94
9	TOTAL GVA at basic prices	100.00	100.00	100.00	100.00	100.00

Key Takeaways:

• Services Dominate: The services sector is the powerhouse, consistently contributing over 50% to GVA. This includes activities like IT, education, healthcare, and finance.

• Manufacturing Steady: Manufacturing holds a steady share, around 15% in 2022-23, with potential for growth through initiatives like “Make in India.”

• Agriculture’s Importance: Though slightly declining, agriculture remains significant at around 18% in 2022-23, highlighting its ongoing role.

• Public Administration Contributes: Public services and defense contribute around 10% to GVA.

Second Advance Estimates of NIEC of GDP, 2022-23 (at 2011- 12 Prices)

This table highlights India’s economic progress through per capita income figures (at constant 2011-12 prices).

India’s Per Capita Income Growth (2020-21 to 2022-23) (at Constant 2011-12 Prices)

Item	2020-21 (Second Revised Estimates)	2021-22 (First Revised Estimates)	2022-23 (Second Advanced Estimates)	% Change (2021-22 over 2020-21)	% Change (2022-23 over 2021-22)
Population (in million)	1355	1369	1383	–	–
Per Capita GDP (INR)	100,981	109,060	115,490	8.0%	5.9%
Per Capita GNI (INR)	99,578	106,822	113,144	7.3%	5.9%
Per Capita NNI (INR)	86,054	92,583	98,118	7.6%	6.0%
Per Capita PFCE (INR)	57,728	63,595	67,555	10.2%	6.2%

Key Takeaways:

• Steady Rise: Per capita income has shown consistent growth, reaching ₹1,15,490 in 2022-23.

• Growth Rates:
  • 2021-22: 8.0% increase over 2020-21.
  • 2022-23: 5.9% increase over 2021-22.

• Per Capita Breakdown:
  • Gross Domestic Product (GDP): ₹1,15,490
  • Gross National Income (GNI): ₹1,13,144
  • Net National Income (NNI): ₹98,118

• Consumption on the Rise:
  • Per capita final consumption expenditure (PFCE) also witnessed growth, reaching ₹67,555 in 2022-23.

Significance of Per Capita Income in India

Per capita income, also known as income per person, is a measure of the amount of money earned per person in a certain area in a specified time period. It is often used as an indicator of living standards or economic well-being. Let’s delve into the significance of Per Capita Income of Indian States.

Economic Indicator

Per capita income serves as a crucial economic indicator that helps gauge the economic health of a country. A higher per capita income indicates a higher standard of living and a robust economy, while a lower per capita income may suggest the opposite.

Policy Decisions

Per capita income is a vital statistic that aids policymakers in making informed decisions. It helps in identifying income disparities, understanding economic challenges, and formulating policies for poverty alleviation and economic development.

Investment Decisions

Investors often consider per capita income while making investment decisions as it can provide insights into a country’s economic stability and growth potential. A higher per capita income might attract more investors as it suggests a wealthier population and potentially larger market for goods and services.

International Comparisons

Per capita income allows for comparisons between different countries, offering a more leveled perspective than absolute economic measures like Gross Domestic Product (GDP). It helps in understanding where a country stands on the global economic stage.

Limitations

While per capita income is a useful measure, it has its limitations. It’s an average figure that doesn’t account for income inequality within a country. Therefore, a high per capita income doesn’t necessarily mean that all individuals are well-off, the income could be unevenly distributed.

Income Disparity in India 

According to official data from 2011, India’s Gini coefficient was 0.45, indicating high income inequality. However, this figure is lower than that of other emerging economies such as Brazil and South Africa. Since the liberalization of the economy in the 1990s, the incomes of the top 10% and 1% have increased significantly, driven mainly by expert services and corporate profits. Unfortunately, India still has a staggering 200 million people living in poverty, according to the World Bank. Minority groups in particular earn very little due to a lack of access to education, healthcare, and employment opportunities.

Responsibilities of the Ministry of Statistics and Programme 

Statistical and Programme Implementation Ministry (MoSPI) analyzes and reports economic growth policy and planning data. Surveys, censuses, and field investigations by the ministry collect data on prices, industrial and agricultural production, employment, income, and demographics. Using statistical methods, expert groups find trends, projections, and problems in large datasets. The ministry publishes economic indicators, market conditions, population, resource allocation handbooks, bulletins, and statistical reports. The lowest per capita income state in India is Bihar.

Per Capita Income of Indian States UPSC

Understanding Per Capita Income of Indian States (PCI) is crucial for UPSC aspirants aiming to excel in the Economy section. Here’s a breakdown:

• What it Means: PCI measures the average income earned by an individual in India annually.
• Importance for Development:
  • Gauges overall economic well-being of India and individual states.
  • Reflects the efficiency of production and distribution of goods and services.
• Calculation:
  • National Income (total monetary value of goods & services produced) divided by India’s total population.
  • Calculated by the Central Statistical Organization (CSO).

Why UPSC Aspirants Should Care:

• PCI is a key indicator of economic growth and development, a frequently tested UPSC topic.
• Understanding its calculation and interpretation demonstrates a strong grasp of economic fundamentals.
• Analyzing variations in PCI across states highlights regional disparities, another critical UPSC theme.

Conclusion

In conclusion, per capita income serves as a valuable metric for gauging a state’s economic development and living standards in India. While some states like Goa and Sikkim boast impressive per capita income figures, significant disparities exist across the country. Regions like Bihar and Jharkhand struggle with lower per capita income, highlighting the need for targeted policies to promote balanced economic growth across all Indian states. Addressing issues like infrastructure development, skill development, and job creation will be crucial in narrowing the gap and improving living standards for all citizens.

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