India’s Per Capita Income

Rs 38,084/- That is the Per Capita Income of Indians in FY2008-09, i.e., on average every Indian ‘s annual income is this amount.

What can you do with Rs.38,084? With the current retail prices I believe you you will find it tough to live in an Indian City. Most of the people I know will find it un-imaginable to even live with this amount for more than 2 months (considering we pay anywhere between Rs.5,000 to Rs.10,000 as monthly rent)

When we daily read and see news articles of multi-crore investments and high-profile individuals, why is the Per Capita Income still so low?
Is it because the media focuses only on the select few and due to constant focus we feel all of us are similiar?
Another aspect is that though 1 or 2 Cr people may have exhorbitant income, the majority still earns less than Rs.2,000 or Rs.3,000 per month. Hard to imagine?

Every News Article points to the fact that Per Capita has doubled in the last 7 years. Questions to ask – has this increase been a result of overall increase in Per Capita even at the Bottom of the Pyramid or Has the Per Capita increased just because the Top of the Pyramid has grown exponentially? My View – the Top of the Pyramid has grown exponentially – Income at the top have grown faster than income at the bottom. This has lead to the Average/Mean to increase.

But the true measure is Median Income. Has it increased? To some extent it would have, but the majority of citizens have not seen major increase in their income esp. people still related to Agriculture.

The articles also points to inflation adjusted Per Capita as Rs.25,661, an increase of 5.6%. Even with the official inflation figures the Per Capita increase is in single digits and less than the GDP growth. If we consider actual ground level inflation, I believe the Per Capita would have infact decreased.

Simple Capitalistic Phenomenon – Rich get Richer, Poor Get Poorer.

Is some policy maker taking note?