The key to India's economic woes — Per capita income still below pre-Covid level

1 Jun 2022 , 02:12 PM

India’s per capita income at constant prices in 2021-22 stood at Rs. 91481. This was below its per-capita income in 2019-20 of Rs 94270. Per — capita income or per person income of the country has come down since 2019-20 because of various Covid restrictions and lockdowns imposed over the past two years. In 2020-21 per capita income of the country had come down to Rs 85110.

Per-capita or per person income is one of the most important measures of the state of the economy. Decline in per capita income indicates to rise in poverty level. It brings a decline in both consumption and savings in the economy.  Decline in savings results in slowdown in investments in the economy.  Per capita income is calculated by dividing total GDP by the total population of the country.

Degree of economic recovery in the foreseeable future will be indicated by how quickly per capita income of the country goes back to the pre-Covid level of 2019-20, and then rises further. In fact, the biggest challenge before the Indian government is how to increase the rate of growth in per capita income of the country. If per capita income of the economy does not rise fast enough then the objective of improving the standard of living of people will not be achieved.