How COVID-19 pandemic has affected the economy can be ascertain from the fact that the Gross Domestic Product (GDP) of 15 states has fallen in the financial year 2020-21 as compared to the year 2019-20. There are nine states where it has slipped to the level of the previous two financial years. Among them Uttar Pradesh, Punjab, Jharkhand, Haryana, Himachal Pradesh and Rajasthan are prominent. In the year 2020-21, the per capita income has fallen by up to six per cent in some states as compared to the year 2018-19.
RBI has given this information in the new report released on the Indian economy. This is the first time that the RBI has released a comprehensive report on Corona's impact on the economy of the states. In this report, RBI has presented the picture of the economy of the states from the year 1997-98 to the year 2020-21 which clearly indicates that the GDP per capita has decreased only once or twice in the last 24 years. In the year 2020-21, India's economic growth rate was minus 7.3 per cent.
As per the report, the per capita Net National Income (NNI) at the national level in the year 2020-21 was Rs 86,659 which is less than Rs 87,586 in the year 2017-18. The per capita GDP has come down from Rs 1, 00,035 to Rs 99,694 in four financial years. In the last two financial years alone, the GDP per capita has decreased by 8.23 per cent. This whole estimate is based on the constant price of GDP, not the current price. Economic experts consider real GDP estimated at a fixed price.
However, according to RBI, the per capita GDP in the year 2020-21 as compared to the year 2018-19 is 6.06 per cent in Uttar Pradesh, 2.67 in Chandigarh, 2.54 in Himachal Pradesh, 0.53 in Haryana, 4.71 in Jharkhand, 5.12 in Punjab and 4.31 per cent in Rajasthan has fallen.
Notably, Bihar is one of the states in which the per capita GDP has increased from Rs 29,092 to Rs 31,017 during this period. Jammu and Kashmir, Tripura, Telangana, Sikkim, Tamil Nadu, Karnataka and Madhya Pradesh are the states whose GDP per capita has not decreased during these two financial years.
However, if compared with the year 2019-20, out of the 22 states that have given their budgetary forms to the RBI, the GDP per capita has decreased in 15 states.
What is Per Capita Income?
It's the average income of individuals living in a country, state, city, or other region. It is estimated by dividing the sum of the incomes of all the people living in that area by the total population of the area. It's considered to be an important index of different countries' living standards. It is one of the three numbers included in the Human Development Index (HDI).
In informal parlance, it's also called an average income and usually if the average income of one nation is higher than that of another nation, then the first nation is considered to be more prosperous and prosperous than the other.
Many international organizations annually compile per capita income lists of countries around the world. These lists are created on two grounds:
Nominal - These simple lists are made un-weighted (i.e. without any modification) by taking the income in the currency directly earned and mostly these lists are used.
Purchasing-Power Parity Inventory (PPP) - These lists are based on purchasing-power parity and estimate how much people can buy in an area with their income, which is different from local prices of goods and services it depends on.
According to latest official data, the India's per capita income reached $1,947.417, while according to Trading Economics global macro models and analysts expectations, the average income per person in India is expected to reach Rs 372.33 per day by the end of 2021,.