Covid brings down per capita GDP below Rs 1 lakh a year

According to the first advance estimate of gross domestic production released by the national statistics office (NSO), per capita GDP in the FY 2020-21 (April-March period) is likely to be at around Rs 99,155, a decline by 8.7% in comparison with the per capita GDP during the last fiscal, as per the constant prices, reports Deputy News Editor Krishnanand Tripathi.

New Delhi:The outbreak of Covid-19 global pandemic that killed over 1,50,000 people in the country and over 1.9 million people worldwide, not only destroyed lives and livelihood but it also brought down India’s per capita GDP below the crucial mark of Rs 1 lakh for the first time in four years, according to the latest official data.

According to the first advance estimate of gross domestic production released by the national statistics office (NSO), per capita GDP in the FY 2020-21 (April-March period) is likely to be at around Rs 99,155, a decline by 8.7% in comparison with the per capita GDP during the last fiscal, as per the constant prices.

The sharp decline comes on the heels of 3.1% growth in the per capita GDP recorded last year.

In 2017-18, the per capita GDP at the constant prices crossed the crucial mark of Rs 1 lakh a year when it touched Rs 1,00,268 from the per capita GDP of Rs 94,751 in 2016-17. It was a jump of 5.82%.

Since FY 2017-18, the per capita GDP never went below the level of Rs 1 lakh a year. In 2018-19, it registered a growth of over 5%, from Rs 100,268 to Rs 105,361.

Per capita GDP clocked a growth of 3.1% between 2018-19 and 2019-20, the slowest since 2016-17 as the economic growth was already declining before the outbreak of the Covid-19 global pandemic.

The per capita GDP went up from Rs 105,361 to Rs 108,620 between FY 2018-19 and 2019-20, an increase of 3.1%.

However, it is expected to suffer a steeper fall than the likely contraction in the national GDP growth rate which has been pegged at 7.7% for the current fiscal as per capita GDP is likely to decline by 8.7% this year.

GDP-Population matrix

Unlike the national GDP, the per capita GDP depends on the variations in the country’s population in the relevant period.

Unlike other emerging and advanced economies, India’s population is expected to continue to grow for the next four-five decades before it will stabilise.

This continued population growth will adversely impact the per capita GDP of the country for several decades. The per capita GDP of a country is obtained by dividing the national GDP of a country by dividing its population in the year.

For example, according to the NSO data, India’s population in the middle of FY 2019-20 (September-October period) was estimated at little over 1.34 billion people and the GDP at the constant price was estimated at over 145 lakh crore for the FY 2019-20. It means the per capita GDP was over Rs 1.08 lakh in the last fiscal.

However, this year not only the real GDP of the country is expected to come down to just Rs 134 lakh crore due to Covid induced economic disruptions, but the population of the country is also expected to rise from 1341 million people in September-October 2019 to 1355 million people in September-October 2020, an increase of 14 million (1.4 crore) people.

A combination of these two factors is expected to bring down the per capita GDP from Rs 1.08 lakh last year to below Rs 1 lakh this year.

India is the world’s second-most populous country with a population of over 1.35 billion people in 2020 while China’s population has been estimated at over 1.44 billion people.

According to the UN projections, India is set to overtake China in 2027 but its population is expected to hit the peak only in 2060 when it is likely to have 1.65 billion people.