MUMBAI: There has been a near 10-fold increase in per capital income in the last four decades from $274 in 1981 to about $2,700 in 2024 on the back of decelerating population growth along with faster economic growth, said RBI deputy governor Poonam Gupta on Tuesday.
“Acceleration in per capita income growth has been even faster than GDP growth during this four decade period. From a modest level of $274 in 1981, and $306 in 1991, our per capita income has increased nearly tenfold to about $2,700 in 2024,” said Gupta in Thiruvananthapuram, while delivering the 14th foundation day lecture at the Centre for Development Studies (CDS), established in 1970 by the late Professor KN Raj.
From 1981, it took about 23 years to double the per capita income whereas in the subsequent 22 years it has increased almost five-fold, she said.
According to the October 2025 forecasts in the World Economic Outlook of the IMF, per capita income is projected to increase to $2,818 in 2025, $3,051 in 2026 and to $4,346 in 2030, she said. "It may be noted that even by 2030, when the economy is likely to be $6 trillion giant, we still will not be a middle income country," she added.
"Looking at the pace of economic growth since the 1980s, it is easily observable that our economy has slowly but surely accelerated, at the pace of 0.03 percentage points a year on an average, during the past four and a half decades," she said.
"While growth rate averaged 5.7% during the 1980s, it improved to 5.8% in the following decade; to 6.3% and 6.6% during the decades of the 2000s and the 2010s, respectively; and further to 7.7% during the last four years," she said. The average growth numbers exclude the Covid years of 2020-21 and 2021-22.
"Ten-year rolling averages of annual GDP growth rate confirm the trend acceleration, as well as the fact that there have not been any periods of prolonged stagnation or secular decline in growth," she said.
Decline in population growth has been an important factor contributing to the acceleration in per capita income, Gupta said, adding population growth has traditionally been significantly higher than that of the world. "However, over the years it has declined at a faster rate than the global rate and, since about 2014, at par with the growth rate in world population and the country has seen a rapid decline in fertility rates since the 1980s," she said.
"Also, since the early 1990s, our economy has been growing much faster than the rest of the world. As a result, share of our economy in the global economy has increased about three times, from about 1.1% in 1991 to 3.5% in 2024," she said.
"The differential in growth rates has further widened in the last decade or so. Meanwhile, our per capita GDP, as a percentage of world per capita GDP, has also increased threefold, from about 7% in 1991 to close to 20% in 2024," said Gupta.
"These are in current dollar terms; in purchasing power parity terms, our per capita GDP relative to world per capita GPD is much larger," she concluded.