The Budget for next year assumed a nominal GDP growth of 11 per cent. It would mean a similar high in the net national income and, adjusted for an increase of 1.2 per cent in population, should yield an expansion of more than 8 per cent in per capita income. Saugata Bhattacharya, chief economist of Axis Bank said, “Nominal GDP growth has been an average 11.7 per cent in the past four years, so with a 1.2 per cent population growth, we can expect per capita incomes to exceed Rs 100,000 in FY17.” He added, “It would be interesting to check the expenditure surveys to gauge the distribution of the rise across income classes.”
Per capita income broadly measures quality of life in a geographical region, country, state or city. It is derived by dividing the country's total income by its population. “At current prices, per capita income is expected to cross the threshold of Rs 100,000 in 2016-17, which is encouraging. However, large regional variations and an urban-rural divide in income levels persist,” said Aditi Nayar, chief economist at ICRA. Crisil chief economist DK Joshi said, “Given that agriculture has suffered and the rural economy is under distress, total per capita income has grown largely on the strength of the urban economy.”
If the average amount crosses six figures, it would have taken India almost seven years to double its per-person annual income from Rs 46,492 in FY10.
