Rediff.com  » Business » 2025: India's per capita income at just $3,005, China's at $13,000

2025: India's per capita income at just $3,005, China's at $13,000

By Ishan Bakshi
October 15, 2014 10:53 IST
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Image: Per capita income presents a grim picture. Photograph: Reuters
 

India's per capita GDP was $3,372 in 2009-10 while China hit this mark a decade ago and the US achieved this more than a century ago.

Through the past decade, India has emerged as one of the largest economies.

Based on the latest purchasing power parity (PPP) estimates released by the International Comparison Program, India surpassed Japan to emerge as the third-largest economy, with gross domestic product (GDP) of $5.7 trillion in 2011, accounting for 6.4 per cent of world GDP. 

However, on the basis of per capita income, India is much lower in the rankings.

One way to look at where the country stands is to see when other countries recorded India's current per capita level.

The only GDP data series that allows for such comparison is that by British economist Agnus Maddison. 

According to this series, based on 1990 Geary-Khamis dollar PPP, India's per capita GDP was $3,372 in 2009-10.

China hit this mark a decade ago - in 1999-2000 -, while Brazil and South Korea recorded this level in the 1970s. The US achieved this per capita income more than a century ago, in the 1890s. 

The question is by how much will India be able to bridge this gap in the coming decades? As growth projections are based on the dollar's value in 2006, these aren't exactly comparable with the estimates cited earlier. 

According to Goldman Sachs, by 2025 India will have per capita income of $3,005 (at 2006 levels of the dollar). By comparison, per capita GDP in Brazil and China is likely to touch $13,000, about four times India's. 

 

The US is likely to have per capita GDP of $57,455, about 20 times India's, indicative of how far India will stand in about a decade.

But as India's projections are based on GDP growth of six per cent through the coming decade, a higher growth trajectory is likely to raise estimates, reducing the gap.

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Ishan Bakshi
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