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  • Per capita income refers to income earned per person in a country on an average basis.
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  • It is calculated by dividing country’s national income by its total population.
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  • Per capita income is used as a tool to measure a country’s standard of living. However, it represents average income per person therefore does not always give accurate representation of the country’s standard of living due to skewness of data towards a small portion of population earning higher income.
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  • Rising per capita income signals growth in the economy translating a productivity increase.
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  • Chart below shows trend in India’s per capita national income over years in actual and growth terms.
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Per Capita Income Trend

 

  • Per capita income can also be applied to a city or state as well.
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  • Indian states have significant disparities in their per capita income with Bihar having lowest per capita income of around 312 and Delhi with highest per capita income of around 2199.
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Per Capita Income Trend

 

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