How to calculate per capita income?

Q: What is the basic method of calculation of Per Capita Income?

Devika, Mumbai

4th March 2015

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Replies (12)

Hi Kunal & Balwinder,
Tax collection of Delhi government registered a growth of 2.64% in 2014-15 as compared to the growth of 10.60% in 2013-14. The state has maintained its consistent revenue surplus which was Rs 6079.53 crore in 2014-15 as compared to Rs 5615.37 crore in 2013-14.

Jay, Delhi-NCR

20th July 2015

Comment

Hey Gyus!!!!
Have you ever calculate your State's Per Capita Income. According to a survey, the National Capital continues to remain the most prosperous state with the highest per capita income in the country with the average per capita income in Delhi remaining more than Rs 2 lakh in 2 consecutive years ie 2013-14 and 2014-15. Delhi is leading among all the states.

Balwinder Singh,

20th July 2015

Comment

Yes, it is quite true that Delhi is leading among them. The annual economic survey for 2014-15, which was tabled on the second day of Budget session in Delhi Assembly, shows an impressive growth of the city's financial situation. The capital has recorded an increase of 8.2% as compared 7.4% at national level during the period.

Kunal,

20th July 2015

@Kunal,
The survey indicates that the annual per capita income in Delhi increased from Rs 2.12 lakh in 2013-14 showing an annual increase of 13.49%. It was almost 3 times more than the national per capita income in 2012-13 that stood at Rs 87748.

Balwinder Singh,

20th July 2015

@Balwinder,
At the same time, The Gross State Domestic Product (GSDP) at current prices during 2014-15 has increased to over Rs4.51 lakh crore, a growth of 15.35% over the previous year. As per the survey, the fiscal deficit of Delhi government was Rs 221.25 crore in 2014-15, which is 0.049% of GSDP, as compared to estimated fiscal deficit of 2.35% of all states during the same year.

Kunal,

20th July 2015

It means if we take devaluation of Rupee into account, per capita income was $1434 dollars in 2014 and $1380 dollars in 2011. Average annual growth is 1.2%.

Promit Dutta, Kolkata

16th March 2015

Comment

As per Govt. resources, the per capita income in Chhattisgarh is estimated at Rs 64442 for the 2014-15 fiscal, while the state's economy is likely to grow by 13.20% during the period. Against the backdrop of continuing economic slowdown, the growth in GSDP can be termed as impressive for Chhattisgarh.

Diptarishi dev, Kolkata

16th March 2015

Hi all,
As per a report received by Parliament, India's per capita income rose by 37.6% to Rs 88533 in the last 4 yrs to 2014-15. If we compared 2013-14, national income and per capita income at current prices during 2014-15 are estimated to have grown by 11.5% and 10.1%, respectively.

Ashish Sharma, Mumbai

16th March 2015

Comment

Well Ashish,
Similarly, the per capita income was at Rs 64316 in 2011-12, Rs 71593 in 2012-13, Rs 80388 in 2013-14 and Rs 88533 in the year 2014-15

The national income in 2014-15 stood at Rs 11217,079 crore, Rs 10,056,523 crore in 2013-14; Rs 8,841,733 crore in 2012-13 and Rs 7,846,531 crore in 2011-12.

Ramesk Polekar, Mumbai

16th March 2015

The least one can say is, it is meaningless! Per capita income of Rs 88533 would translate to a household income of Rs.29511/ month for a family of 4. I wonder whether even 10% of the household in India has that kind of income! 5% would be nearer to the reality perhaps! If median household income is brought out that would be a great disclosure.

Amit Raj, Delhi-NCR

16th March 2015

Hi Roshni,
In India, urban areas have seen a much higher growth rate as compared to rural areas. Despite up to 3/4 of the population living in rural areas, rural areas contribute to only 1/3 of the national income.The main reason for rural India's poor performance in terms of income is the fact that rural India is mostly dependent on agriculture. The agriculture sector in India grew at a rate of only 1.6% in 2008-09.

Ramesk Polekar, Mumbai

10th March 2015

Comment

But the Indian Economy grew at a rate of 6.7%, despite the 2008 Financial Crisis. An extremely slow rate of growth in the agriculture sector of the Indian economy has serious implications for the rural-urban divide, both in terms of income and GDP. Some estimates say that that the average income of a person living in an urban area may be up to 4 times higher than that of a person living in a rural area. The rising levels of urbanization in India is a major reason for the rising levels of income disparity in the country.

Roshni Pawal, Mumbai

10th March 2015

Do you know that in 2013 per capita income of was $ 1570, ranked at 120th out of 164 countries by the World Bank, while its per capita income on purchasing power parity (PPP) basis was US $ 5350, and ranked 106th. India's average GDP per capita on PPP basis in 2009, according to The Economist, was US $ 5138, with significant variation among its states and union territories. Chandigarh had the highest per capita PPP GDP at US $ 9345, while Bihar the lowest with per capita PPP GDP of US $ 1019 as of 2009. In rupee terms, India's Per capita income grew by 10.4% to reach Rs.74920 in 2013-14.

Ramesk Polekar, Mumbai

10th March 2015

Comment

Thanks for the valuable information,
Can you tell me which state of India has the highest and the lowest per capita Income? What is the main reason for rural India's poor population in terms of income. What is the growth rate of agriculture sector in India?

Roshni Pawal, Mumbai

10th March 2015

HI,
Per capita income of a nation is calculated by evenly dividing a country's national income by its population.

Whereas. per capita income of a family is calculated by taking the total gross household monthly
income divided by the total number of family members living together.

Ashish Sharma, Mumbai

7th March 2015

Comment

Well Rajat,
The revised method of calculation takes into account gross value added in goods and services as well as indirect taxes. Also, the base year has been changed from 2004-05 to 2011-12.

The per capita net national income during 2014-15 is estimated to be Rs 88538, showing a rise of 10.1% as compared to Rs 80388 during 2013-14 with the growth rate of 12.3%.

Miraniyatin, Mumbai

6th March 2015

Comment

India's monthly per capita income, the measure of standard of living, is likely to be at Rs 7378.17 ($118.68) this financial year, up over 10% from last year, after a revision in the method of calculations.

Government data shows, in the previous fiscal, the per capita income estimated to have grown by over 12% to Rs 6699 ($107.75) per month.

Rajatrawal, Mumbai

5th March 2015

Comment

Absolutely right,
Per capita income is often used as average income, it can also be used as a measure of the wealth of the population of a nation, particularly in comparison to other nations. Per capita income is often used to measure a country's standard of living. It is usually expressed in terms of a commonly used international currency such as the Euro or United States dollar, and is useful because it is widely known, easily calculated from readily-available GDP and population estimates, and produces a useful statistic for comparison of wealth between sovereign territories. This helps the country to know their development status.

Dev Patel, Mumbai

4th March 2015

Comment

But at the same time per capita income has several weaknesses as an accurate measurement of prosperity: 1) Comparisons of per capita income over time need to take into account changes in prices. Without using measures of income adjusted for inflation, they will tend to overstate the effects of economic growth. 2) As it is a mean value, it does not reflect income distribution. If the distribution of income within a country is skewed, a small wealthy class can increase per capita income far above that of the majority of the population. In this respect Median income is a more useful measure of prosperity than per capita income, because it is less influenced by the outliers. 3) Economic activity that does not result in monetary income, such as services provided within the family, or for barter, is usually not counted. The importance of these services varies widely among different economies.

Shaunak Verdla, Mumbai

4th March 2015

How to calculate monthly per capita income (PCI)? What kind of income is counted? How the census calculates per capita income?

Dev Patel, Mumbai

4th March 2015

Comment

Hi Dev,
The Census calculates it by taking the total income for the previous year for everyone 15 years and older. That total income estimate is then divided by the total number of people -- every man, woman and child regardless of age.

First, earned income, including wages, salaries, and any self-employment income. It does not include employer health care contributions, borrowed money, gifts or inheritance, insurance payments, and money received from relatives living in the same house.

Roshni Pawal, Mumbai

4th March 2015

Secondly, investment income including interest, dividends, rentals, royalties, and income from estates and trusts. However, capital gains and money received for selling your home are not included.

And 3rd, government transfer payments are counted as income. This includes Social Security or Railroad Retirement, Supplemental Security Income (SSI), public assistance or welfare, and retirement, survivor, or disability pensions. It does not included food stamps, public housing subsidies or medical care. It also doesn't count tax refunds.

Roshni Pawal, Mumbai

4th March 2015

Hi,
Per capita income is the average amount of money that a particular group of people receives in one year.
This calculation gives economists a way of measuring the standard of living or relative prosperity of people in a specific area.

Select and count the people of all ages in a particular group -- for example a nation, state or city. Add up the total income for the group for a specific year. Divide the total income by the number of people. The result is the per capital income.

Roshni Pawal, Mumbai

4th March 2015

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