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India's per capita income to rise by $2,000 over 5 years: Sitharaman

Finance Minister Nirmala Sitharaman has remarked that there will be a significant surge in per capita income over the next five years explaining the country's significant economic progress.

By Ishita Ganguly
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Finance Minister Nirmala Sitharaman

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Speaking at the Kautilya Economic Conclave, Finance Minister Nirmala Sitharaman remarked that while it took the country 75 years to achieve a per capita income of $2,730, there will be a significant rise in per capita income over the next five years.

She explained the country made significant economic progress, bouncing back from the adverse effects of the COVID-19 pandemic. "While it took us 75 years to reach a per capita income of $2,730, as per IMF projections, it will take only five years to add another $2,000," Sitharaman commented. 

The Finance Minister’s prediction

Describing the upcoming decades as 'period-defining', she predicted that the living standards of Indians would quickly improve. The Minister added that India’s per capita income would grow by an additional $2,000 in the coming half-decade.

She mentioned consumption plays a pivotal role in the country’s economy, making it up to over 60 percent of India's GDP. She said the country’s youthful population, with nearly 43 percent being under 24 years old will play a major role in boosting consumption over the next decade.

 "As of now, 43% of Indians are younger than 24 years old, and they have yet to explore their consumption behaviour fully," she said.

Moreover, the Minister is confident the growing middle class would contribute to India's marketplace, attract foreign investment, and fuel economic growth.

"The upcoming decades will see the steepest rise in living standards for the common man, truly making it a period-defining era for an Indian to live in," she remarked.

The Union Minister also said that these improvements are being seen alongside declining inequality, citing data referring to a fall in the Gini coefficient. For the unawares, the Gini coefficient measures inequality in income and consumption. In India, it has fallen for both rural and urban areas. For rural parts, it declined from 0.283 to 0.266, and for urban regions, it fell from 0.363 to 0.314.

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