By R. Suryamurthy
The Ministry of Finance’s recent responses in Parliament to two seemingly unrelated questions—on per capita income and per capita public debt—offer a revealing snapshot of India’s economic reality in mid-2025. At first glance, the numbers seem reassuring: the per capita net national income (NNI) has risen from ₹72,805 in 2014–15 to ₹1,14,710 in 2024–25—a 57.5% increase over a decade. Meanwhile, the Union government promises to reduce its debt-to-GDP ratio to 50% by 2030–31.
But beneath these headlines lies a more troubling picture—of widening regional disparities, unsustainable debt burdens, and a persistent policy gap between growth and equity. When examined together, the data in Lok Sabha Unstarred Questions raise fundamental questions about the nature of India’s growth and whether the promised dividends of “Sabka Saath, Sabka Vikas” are reaching the average citizen.
According to the Finance Ministry, the per capita income in 2024–25 stands at ₹1,14,710 at constant prices. This would imply real income growth, even after adjusting for inflation, and suggests rising national prosperity. Yet, the per capita debt liability of the Union government, as of March 31, 2025, is a staggering ₹1,32,059.66—meaning the average Indian technically owes more to the government’s creditors than they earn in a year
In isolation, either figure might not be alarming. But taken together, they present a paradox: even as citizens earn more, they are simultaneously saddled with a growing share of public debt—an invisible tax that threatens to undermine long-term fiscal stability and public investment capacity.
Consider the following: interest payments on government liabilities have risen from ₹9.29 lakh crore in 2022–23 to ₹11.18 lakh crore in 2024–25, with a budgeted outlay of ₹12.76 lakh crore for 2025–26
That’s nearly a quarter of total central government expenditure being channelled not into health, education, or infrastructure, but to service old debt.
The government has pledged to reduce the fiscal deficit to 4.4% of GDP in 2025–26 and commit to a declining debt trajectory from 2026 onward. Yet the credibility of this plan hinges on assumptions about robust GDP growth and tax buoyancy—both of which remain uncertain amid global economic turbulence and uneven domestic recovery.
The most glaring insight from the per capita income data is the stark divergence between states. In 2024–25, Goa, Karnataka, Telangana, Tamil Nadu, and Maharashtra report per capita incomes above ₹1.75 lakh, while Bihar, Uttar Pradesh, Jharkhand, and Madhya Pradesh languish below ₹75,000. In fact, Bihar’s per capita income is roughly one-sixth of Goa’s.
Some states have nearly doubled their per capita incomes in a decade—Odisha, Karnataka, Telangana—while others have registered anaemic growth. For instance, Uttar Pradesh’s per capita income grew just 47.9% over the ten-year period, compared to over 85% in Telangana and 96.7% in Odisha.
This divergence reflects not just different starting points but structural inequalities in education, industrialisation, governance, and investment. The Centre’s narrative of inclusive growth rings hollow when such gaps are widening, not narrowing.
The government attributes disparities in income growth to “varying levels of economic development, sectoral composition, structural disparities, and governance mechanisms.” While true, this passive diagnosis sidesteps the Centre’s own accountability. The lack of targeted fiscal transfers, delayed GST compensation, and one-size-fits-all economic policies have often exacerbated state-level fragilities.
Moreover, the Centre’s rhetorical commitment to “Sabka Saath” often translates into budgetary neglect for poorer states, which are least equipped to invest in human capital or attract private investment. In a federal system, a rising national income cannot be the only metric of success—convergence in per capita incomes across states should be the goal, not merely a statistical byproduct.
Even within the richer states, average per capita income masks glaring internal inequalities. High-income states like Maharashtra and Delhi also have some of the most unequal urban-rural income distributions. Without granular data on income distribution—especially post-pandemic—there is no clarity on whether the income gains are accruing to the bottom 50% or concentrated among the top decile.
India remains one of the few major economies that does not publish regular income or wealth distribution data. The celebration of per capita income, then, becomes a sleight of hand—conflating aggregate averages with individual well-being.
Public debt, often framed as a macroeconomic issue, is ultimately a social contract—today’s liabilities are tomorrow’s tax burdens. The per capita debt figure of ₹1.32 lakh means every Indian, including the newborn, carries the weight of past borrowings.
The ballooning interest bill also crowds out capital expenditure. At a time when India desperately needs investments in healthcare, green transition, digital infrastructure, and job creation, debt servicing is becoming a fiscal millstone.
The government’s roadmap to bring down debt to 50% of GDP by 2030 is laudable but lacks binding institutional mechanisms. The Fiscal Responsibility and Budget Management (FRBM) Act has already lost credibility due to repeated violations and deferrals. Without an empowered fiscal council or legislative oversight, these commitments remain aspirational.
Per capita income, while useful as a broad measure, can mislead when elevated to the status of policy gospel. It says nothing about employment, asset distribution, access to public goods, or social mobility. A ₹1.14 lakh per capita income spread across 1.4 billion people tells us little about how that income is earned—or who earns it.
For a government that prides itself on economic stewardship, these figures should provoke introspection, not triumphalism. Is the income gain trickling down to rural workers, informal labourers, and micro-entrepreneurs? Is it being offset by rising inflation, joblessness, or debt?
The danger lies in policy complacency—where average growth metrics mask lived deprivations, and rising public debt is brushed aside as a necessary evil.
India needs a more grounded and multidimensional economic narrative. One that acknowledges the limits of averages, the urgency of regional convergence, and the costs of unchecked debt accumulation. Economic management cannot be about juggling statistics to project stability; it must be about fostering equity, sustainability, and resilience.
Policymakers must pivot from macroeconomic optics to microeconomic justice—from boasting of growth to ensuring its fair distribution. Until then, the “per capita” story remains half-told—an arithmetic illusion of prosperity that few truly experience. (IPA Service)
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