A higher per capita GDP growth also means that the standard of living of the people is rising as each person has more money to spend.
IMF data shows that in 2004, India's per capita GDP was $635 which is 35 per cent of the average per capita GDP of $1,790 for 150 countries listed as "emerging market and developing economies" by the multilateral financial institution. These peer countries include China, Russia, Brazil, and countries in South America, Africa, the Middle East as well as parts of Eastern Europe.
Experts point out that this figure of 35 per cent declined to 30 per cent by 2014 which shows that India became relatively poorer than these 150 countries which performed better. However, this ratio increased from 30 per cent in 2014, to 37 per cent in 2019, according to IMF figures.
India's per capita GDP in 2024 has shot up further to $2,850 which works out to 42 per cent of the $6,770 for its peer countries. This means that the gap has been narrowed with India's economic performance being better than the other emerging economies in the last 10 years.
IMF data also shows that in 2004, India's economy was 37 per cent the size of the Chinese economy but by 2014, it had fallen to a mere 19 per cent as China was clocking a much higher rate of growth. However, with the Indian economy growing at a much faster growth rate than China, the tables are being turned and the relative size of the economy has gone up to 22 per cent.
With India now emerging as the fastest-growing major economy in the world and China lagging behind the relative size of the economy vis-a-vis the Communist country is also increasing.
Based on the strong macroeconomic fundamentals, India is now headed to be the third largest economy surpassing Germany and Japan and what is equally important is that the per capita GDP is rising reflecting a better standard of living for the people.
