Household savings in India hit lowest levels in three decades, as rural demand remained under pressure due to inflation. But per capita income, which indicates the average earnings per person in India, paints a different picture. There has been a two-fold increase in per capita income for India since FY15, but only the top 10 per cent of the population has made the most of it.
Inequality rising behind statistics
Although the rise from Rs 86,000 to Rs 1.72 lakh indicates a 99 per cent rise, in real terms it has gone up by just 35 per cent, taking inflation into account. Most of the rise in salaries has gone towards the top 10 per cent, which are people who make more than Rs 3 lakh a year, while the median wages declined. This inequality is highlighted by the manner in which the real wage for Indian workers, representing 90 per cent of the workforce, has dropped, while corporate employees are on track for a 10.3 per cent raise.
Need better redistribution
Although India remains relatively better than most economies during dark times, average per capita income for all citizens hides inequalities, and uneven development in different regions. Steps for appropriate redistribution, while keeping per capita income growth at 5 per cent, could improve the situation.
