Per capita income growth under UPA outpaced NDA: Chidambaram

Former Union finance minister P. Chidambaram has drawn attention to the comparative growth of India’s per capita income under the Congress-led United Progressive Alliance (UPA) and BJP-led National Democratic Alliance (NDA) governments, urging a broader and more nuanced perspective on the country’s economic progress.

His remarks came in response to recent statements by NITI Aayog CEO B.V.R. Subrahmanyam, who noted that India’s per capita income had doubled from $1,438 in 2013-14 to $2,880 in 2024.

Citing data from the International Monetary Fund (IMF), Chidambaram highlighted that India’s per capita income was $543 in 2003, rose to $1,438 in 2013, reached $2,711 in 2023, and is projected at $2,878 in 2024. He pointed out that under the UPA government, per capita income more than doubled over 10 years, growing by a factor of 2.64.

In comparison, under the NDA government, per capita income grew by a factor of 1.89 in 10 years, falling short of doubling, though it did double over an 11-year period. “I am happy with the record of both governments but a shade happier with the UPA record,” Chidambaram said in a social media post.

The comments come amid ongoing discussions about India’s economic achievements, with the Modi government emphasising the country’s rise to the world’s fifth-largest economy and its ambitions to become the third largest. However, Chidambaram and several economists argue that per capita income is a more meaningful indicator of economic well-being than aggregate GDP.

The former finance minister also drew attention to India’s relatively low global ranking in per capita income, with the IMF placing the country at 136th worldwide for 2024.

Independent analyses support Chidambaram’s call for a more comprehensive assessment. While nominal per capita income has nearly doubled since 2014, real (inflation-adjusted) growth has been more modest at about 35 per cent over eight years, or roughly four percent annually.

During the UPA years, real per capita income grew faster, with a compounded annual growth rate of five per cent in the first nine years, compared to a slower pace under the NDA.

Economists also caution that headline per capita income figures can mask rising inequality. The top 10 per cent of Indians now own 60 per cent of the nation’s wealth and earn 57 per cent of its income, with the gap between rich and poor widening in recent years. “The average masks the inequality,” said Nagesh Kumar, director of the Institute for Studies in Industrial Development.

This discussion reflects a broader debate about how to measure economic success. While the NDA government highlights overall GDP growth and improved global rankings, critics stress that gains in average income and reductions in inequality are more relevant to the lives of most Indians. The UPA era, despite challenges such as the global financial crisis, saw higher growth in real investment and exports, contributing to faster per capita income gains.

Chidambaram’s observations underscore the importance of looking beyond headline figures to consider both the pace and distribution of economic growth. As India aims to become a global economic powerhouse, the challenge remains to ensure that prosperity is widely shared and that per capita income gains translate into improved living standards for all citizens.