Income in India

India's nominal per capita income was US$1,670 per year in 2016, ranked 112th out of 164 countries by the World Bank,[4] while its per capita income on purchasing power parity (PPP) basis was US$5,350, and ranked 106th.[5] Other estimates for per capita gross national income and gross domestic product vary by source. For example, India's average GDP per capita on PPP basis in 2009, according to The Economist, was US$5,138, with significant variation among its states and union territories. Goa had the highest per capita PPP GDP at US$14,903, while Bihar the lowest with per capita PPP GDP of US$682 as of 2015[6] In rupee terms, India's per capita income grew by 10.4% to reach Rs.74,920 in 2013-14.

While India's per capita incomes were low, the average household size and consequent household incomes were higher. India had a total of 247 million households in 2011, with an average of about 4.9 people per household, according to Census of India.[7]

Estimates for average household income and the size of India's middle income households vary by source. Using World Bank's definition of middle income families to be those with per capita income between $10 and $50 per day,[8] the National Council of Applied Economic Research[9] of India completed a survey and concluded there were 153 million people who belonged to middle income group in 2006. In contrast, Meyer and Birdsall and Tim Light used a different survey and estimated the number of Middle-Income population to be about 70 million in 2009-2010.[10] These groups, as well as the World Bank, estimated in their 2011 reports that if India's economy continues to grow per projections, India's middle income group would double by 2015 over 2010 levels, and grow by an additional 500 million people by 2025. This would make it, with China, the world's largest middle income market.[11]

Compared to other countries, income inequality in India is relatively small as measured by Gini coefficient. India had a Gini coefficient of 32.5 in the year 1999- 2000;[12] India's nominal Gini index rose to 36.8 in 2005, while real Gini after tax remained nearly flat at 32.6.[13]

The states of India have significant disparities in their average income.[14] Bihar was by far the poorest in India, and per capita income was low in its neighbouring states, along with Uttar Pradesh, Jharkhand, Jammu & Kashmir, Assam, Manipur, and Nagaland.[15] The higher income states include Goa, Delhi, Haryana, Sikkim, Telangana, Maharashtra, Tamil Nadu, Gujarat, Himachal Pradesh, Punjab, Uttarakhand, and Kerala.[16][17][18]

Gini coefficient of India and other countries according to the World Bank (2018).[19] Higher Gini Index means more income inequality.

As in other countries, residents of Indian cities have a higher per capita income and standard of living than rural residents. Towns and cities make more than two-thirds of the Indian GDP, even though less than a third of the population live in them.[20]

The Economic Survey of India 2007 by OECD concluded that:

"At the state level, economic performance is much better in states with a relatively liberal regulatory environment than in the relatively more restrictive states".[20]

The analysis of this report suggests that the differences in economic performance across states are associated with the extent to which states have introduced market-oriented reforms. Thus, further reforms on these lines, complemented with measures to improve infrastructure, education and basic services, would increase the potential for growth outside of agriculture and thus boost better-paid employment, which is a key to sharing the fruits of growth and lowering poverty.

• List of Indian states and union territories by GDP per capita
• States of India by size of economy
• Poverty in India

• Per Capita Net State Domestic Product – State-Wise (At Current Prices)
• National Income Of India