India’s rapid rise as a global economic powerhouse has reignited a familiar concern: why has per capita income not increased at the same pace as GDP? According to IMF estimates, India’s nominal GDP crossed $4 trillion in 2025, while per capita income stood at just $2,818—far below China and advanced economies.
Economists argue this gap reflects sequencing rather than imbalance. Large economies often expand in total output before individual incomes rise meaningfully. India’s growth has been powered by scale, population size, and market expansion, while productivity gains have lagged due to structural challenges in employment.
Nearly half of India’s workforce remains employed in agriculture, which contributes less than one-fifth of GDP, while informal employment continues to dominate the labour market. Limited urbanisation and slow movement into higher-productivity sectors have kept average earnings low.
At the same time, India’s expanding GDP has strengthened foreign investment, infrastructure spending, renewable energy capacity, and fiscal headroom. Economists stress that economic scale creates the foundation for long-term income growth, but only if accompanied by job creation, productivity improvements, and workforce formalisation.
Raising per capita income remains urgent for sustaining social stability, expanding the middle class, and fully realising India’s demographic dividend. Experts say the challenge ahead is converting economic scale into widespread prosperity.