Indians earn double what they did in ’01

The average Indian’s income in 2007-08 has nearly doubled since the turn of the millennium and even adjusting for inflation, it has risen over 50% in this period. The quick estimates of per capita income for 2007-08, put out by the Central Statistical Organisation (CSO), peg per capita income for that year at Rs 33,283 in current prices. In 2000-01, the per capita income was only Rs 16,688 or roughly half of the 2007-08 figure. In inflation-adjusted or real terms, the growth in incomes has been much more modest, but by no means insignificant. In terms of constant (1999-2000) prices, the per capita income was Rs 16,173 in 2000-01 and rose to Rs 24,295 by 2007-08. That’s a rise of just a little more than 50% over a seven-year period. Much of this sharp rise in average income levels has happened in the five years starting 2003-04. Thus, the 2007-08 figures were 76% higher than those of 2002-03 in nominal terms and 42% higher in inflation-adjusted terms. That’s because the economy grew at 12%-plus rates in nominal terms for each of these five years or 7.5%-plus rates in real terms. Even allowing for the population growing at a little under 1.5% per year, that meant that incomes grew by double digit rates—between 10.5% and 13.5%—in each of these years. In inflation adjusted terms, that translated into five successive years of incomes rising by over 5%—between 5.6% and 8.2% to be precise. If the 7% growth projected officially does materialize in the current financial year, we could have a sixth successive year of 10%-plus growth in nominal per capita income and 5%-plus increase in the inflation adjusted average income level.