World Population Day: Celebrating India's Economic Growth and Potential

World Population Day, observed on July 11, highlights the importance of population issues and their impact on global development. As India becomes the most populous country, understanding GDP per person is essential to gauge the economic well-being of its citizens. This blog delves into India's economic standing, the wealth of an average Indian, and the positive implications of its population dynamics, using the latest statewise data for a comprehensive analysis.

India's Population and Economic Standing

India, with over 1.4 billion people, is the most populous country in the world. It is also the 5th largest economy, showcasing significant economic growth over the past few decades. This dual status of high population and substantial economic size presents unique opportunities for the nation to harness its demographic dividend for sustained growth and development.

GDP per Person: A Snapshot

GDP per person, or per capita GDP, is calculated by dividing the country's total GDP by its population. As of now, India's GDP per person is approximately ₹1,47,000. This metric provides a clearer picture of the average economic output and standard of living for an individual in India, highlighting the nation's potential for further economic growth and prosperity.

Statewise Analysis of GDP

India's economic landscape is diverse, with significant progress and opportunities across different states. Here is the latest statewise data for the per capita Net State Domestic Product (NSDP) at constant prices for 2021-22:

-source: ministry of Statistics & Programme Implementation

Historical Perspective on GDP

India's economic journey has been remarkable. From a GDP of ₹1,50,000 crore in 1980 to over ₹3.42 lakh crore in 2023, the country's growth has been fuelled by key economic reforms in the 1990s and the IT boom. These milestones have played a crucial role in shaping the current economic landscape and laying the foundation for future prosperity.

Wealth of an Average Indian

Despite impressive economic growth, the wealth of an average Indian is on an upward trajectory. Factors such as increasing household savings, expanding access to education and healthcare, and ongoing economic reforms contribute to the improving standard of living for many Indians. The GDP per person provides a broad view of economic well-being, reflecting the nation's potential for inclusive growth and shared prosperity.

GDP of India vs. GDP per Indian

Understanding the distinction between total GDP and GDP per person is vital for comprehending India's economic health and individual prosperity:

Total GDP: This represents the cumulative economic output of a country, indicating the overall size of its economy. As of the latest data, India's total GDP stands at around ₹3.42 lakh crore. This figure makes India the 5th largest economy globally, reflecting its significant economic influence and potential for further growth.

GDP per Person (Per Capita GDP): This metric divides the total GDP by the population, providing an average economic output per individual. For India, the per capita GDP is approximately ₹1,47,000. This figure is crucial for understanding the average standard of living and economic productivity per person.

Implications of Total GDP vs. GDP per Person:

Economic Scale vs. Individual Wealth: While total GDP showcases the economic scale and global influence of a country, GDP per person highlights the wealth and economic health of an average citizen. A high total GDP with a growing GDP per person indicates that national economic activity is increasingly benefiting individual prosperity.

Policy Focus: Policymakers need to balance between boosting total GDP and improving per capita GDP. Strategies aimed at raising GDP per person can promote more inclusive growth, improving living standards across the population and reducing income inequality.

Income Equality: The increasing GDP per person in India underscores the potential for reducing income inequality. By ensuring that economic growth benefits a larger portion of the population, the nation can move towards a more equitable distribution of wealth.

Regional Opportunities: The statewise data further highlights opportunities for regional development. States like Goa and Delhi have high per capita NSDP, reflecting better economic conditions and infrastructure. Conversely, states like Bihar and Uttar Pradesh have much lower figures, indicating the need for targeted regional development policies to unlock their potential.

Population: Boon and Catalyst for Growth

The impact of India's population on its economy is overwhelmingly positive:

Boon: A large population can lead to a demographic dividend, boosting the workforce and consumption, potentially driving economic growth. India's young and dynamic population is a significant asset, providing a vast pool of talent and innovation.

Catalyst for Growth: With strategic investments in education, healthcare, and infrastructure, India's population can be a powerful catalyst for sustained economic growth and development.

Financial Assets: Bank Fixed Deposits and Bonds

India has a robust financial market, with significant investments in bank fixed deposits and bonds:

Bank Fixed Deposits: Totalling over ₹150 lakh crore, these deposits are a popular and secure investment option, reflecting the trust and confidence of Indian savers in the financial system.

Bonds: Both corporate and government bonds play a crucial role in the financial landscape, providing avenues for investment and financing.

1. Where to buy corporate bonds in India: Investors can purchase these through banks, financial institutions, and online trading platforms, offering diverse investment opportunities.
2. Buy government bonds in India: These are available through auctions conducted by the Reserve Bank of India (RBI), as well as in the secondary market, providing a stable and secure investment option.

Urban vs. Rural Economic Dynamics

India's economic growth is inclusive, benefiting both urban and rural areas:

Urban Areas: Cities like Mumbai and Delhi have higher GDP per person due to better infrastructure, job opportunities, and access to services. Urban centers are hubs of innovation and economic activity, driving national growth.

Rural Areas: Rural areas are increasingly benefiting from improved access to markets, education, and healthcare, enhancing their economic potential and standard of living. Government initiatives and investments are fostering rural development, creating a more balanced economic landscape.

Conclusion

India's economic landscape is vibrant and dynamic, influenced by its vast population and diverse regional economies. Understanding GDP per person is crucial for addressing economic disparities and planning sustainable growth. As India navigates its future, balancing population growth with economic development will be key to ensuring prosperity and improved living standards for all its citizens.

Reflecting on these dynamics on World Population Day reminds us of the importance of inclusive and sustainable development, aiming for a future where every Indian can thrive. With a young and dynamic population, strategic investments, and a focus on inclusive growth, India's potential is limitless, heralding a bright and prosperous future for the nation.