India tops in per capita income growth rate
By siliconindia staff writer   |   Thursday, 11 December 2003, 20:30 IST   |    1 Comments
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NEW DELHI: India is the only country across economies that has experienced acceleration in growth rates of per capita income over the past decade ('92-02). This means almost all other economies have shown increase in growth rates lower than India's or negative growth rates through the decade. Also, India's per capita income growth over the past five years (‘97-02) has outperformed that of other developed and major Asian economies, save China, reports an Indian daily. India ’s per capita income grew by about 19% in ‘97-02, second only to China , whose per capita income grew by 39%. The only other emerging Asian country that compares with India ’s growth rates is Korea , which has grown around the same rate as India . Taiwan comes fourth with a growth rate of 13% during the period. India is second to none in terms of increase in growth rates over the decade. In fact, it is the only country that has experienced an increase in growth rates of per capita income. During ‘92-02, India ’s per capita income grew by 46% — a rise of 980 basis points (9.8%) from the 36.5% growth rate observed during ‘82-92. On the other hand, China has shown a decline in growth rate over the decades by as much as 700 basis points (7%). And countries such as Thailand and Hong Kong have seen a fall in growth rates by as high as 6,200 basis points (62%) and 5,100 basis points (51%) respectively. With dollar dominance on the wane, the growth rates are calculated in local currencies for the respective economies. This factors in a situation where the dollar value is constantly declining. This means that data in local currencies is comparable as different currencies are appreciating/ depreciating at different rates against the dollar. In terms of current dollar rates, India ’s per capita income has increased by 61% from $1,600 in ’92 to $2,570 in ’02. What explains this phenomenon? The answer lies in the demographic shift that is taking place in India . To put it simply, India is growing younger at a faster pace than other Asian economies. The number of working-age adults in the country is rising. While this is true of China as well, the pace of increase is faster in India than in China . Thus, even with China ’s vigorous population policies, its per capita income growth is not rising as fast as India . But the developed economies have reached a stage where the ratio of working adults to total population is on the decline. Given the fact that the trend will last for a few more decades, it’s likely that increase in India’s per capita income growth will continue to rise, while that of other economies will fall behind. (Source: Economic Times)

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