During this period, an increase of 7.9 percent has been estimated.
Excluding the Corona period and the year before that, the growth rate in per capita income in the financial year 2023-24 is estimated to be the lowest in 21 years. During this period, an increase of 7.9 percent has been estimated. Earlier, only in 2019-20 when there was a huge decline in the economy and after that in 2020-21 i.e. the year of Covid, the growth rate in per capita income was less than 7.9 percent. In the absence of the Gini coefficient, per capita income is widely considered an indicator of a country's prosperity.
Per capita income growth rate may be lowest in 21 years!
The growth rate in real gross domestic product (GDP) during the current financial year is estimated to be 7.3 percent. Before this, the initial estimate had predicted a growth of 6.5 percent. According to estimates, per capita income is likely to increase to Rs 1,85,854 crore in 2023-24, which was Rs 1,72,276 in the previous year.
The growth rate of per capita income had come down to 5.1 percent in 2019-20, which was 9.3 percent in the previous financial year. In 2020-21 i.e. during the Corona period, per capita income had decreased by 4 percent. Apart from this, the growth rate in per capita income during 21 years has been more than 7.9 percent. In 2002-03, the growth rate of per capita income was only 6.2 percent.
Reason for low growth rate of per capita income?
One reason for the low growth rate of per capita income in 2023-24 is low GDP deflators. Nominal GDP growth has also fallen to 8.9 percent, which was 16.1 percent in the previous year. It was estimated in the budget that nominal GDP growth during 2023-24 would be 10.5 percent. It is also noteworthy that the per capita income is as per the current prices. Most GDP depleters are taken from wholesale prices. The inflation rate based on the Wholesale Price Index has remained below zero in most of the months of 2023-24 till December. One reason for this can also be considered to be the income of the employees. Per capita income is based on net national income (NNI).
What do experts say?
According to media reports, Madan Sabnavis, Chief Economist of Bank of Baroda, said that the main reason for the minimum growth rate in per capita income in FY 24 (except Covid and surrounding years) is the low growth in net national income. He said, 'This happened due to low wholesale inflation rate, which has been below zero in most of the months. This is a negative effect of the positive sign of decreasing inflation rate. The real growth in GDP has been 7.3 percent, which is a better figure. If international comparison is made, per capita GDP growth is seen at current prices. According to this also, the growth rate in per capita income is estimated to fall to 7.9 percent in the current financial year, which was 14.9 percent in the previous financial year.
Published – January 17, 2024, 03:52 IST
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