PER CAPTIA INCOME

Subject: Economy

Context : India is likely to end the current year with a per captia GDP lower than of bangladesh , making it third poorest nation in south asia according to IMF world economic outlook.

Concept :

• Per capita income (PCI) or average income measures the average income earned per person in a given area (city, region, country, etc.) in a specified year. It is calculated by dividing the area’s total income by its total population
• GNP (Gross National Product)

  It is the market value of all products and services produced in one year of a country (i.e., by labour and property).

  GNP = GDP + X – M.

• Net National Product (NNP)

 It is the value of GNP after deducting depreciation of plant and machinery.

 NNP = GNP – Depreciation

• National Income (NI) = NNP – Indirect Taxes + Subsidies
• Per-Capita Income (PCI)

 It is the average income (per person) of a country.

 Per−Capita Income=National Income/ Total population.

Reasons for deviation with bangladesh:

• Since 2017, India’s growth rate decelerated sharply while bangaldesh has witnessed faster growth rates.
• Over the 15 year period , Indias population grew at a pace higher than that of bangladesh.
• Lastly , immediate impact was due to COVID19 which contracted indian economy by 10% whereas Bangladesh is expected to grow by 4%.