NEW DELHI: The per capita income of Indians for the first time crossed the Rs 50,000-mark in 2010-11, although using current prices as the barometer. According to the revised GDP data for the last financial year, per capita income is estimated to have risen 16.9% to Rs 53,331 compared to Rs 46,117 in the previous year.

The $1,000-average income of Indians is seen to be illusionary in economic circles as economists prefer to use factor cost to weed out the impact of inflation. Based on 2004-05 prices, per capita income saw a modest 6.4% increase and reached Rs 35,993 in 2010-11, compared to Rs 33,843 in the previous year.

"Due to the inflationary conditions last year, the nominal per capita has shown a big jump. It does not matter much. What matters is the increase in per capita in 2004-05 prices, which is growing at 6.4%. The Rs 50,000-mark is not a great milestone to celebrate," said N R Bhanumurthy, professor at National Institute of Public Finance and Policy. Based on current prices, GDP rose by 18.8% in 2010-11, data released by the Central Statistics Office on Tuesday showed. But it is the real GDP-which factors in the impact of inflation-that is used to gauge economic expansion. By that measure, the Indian economy grew 8.4%.

"Real GDP growth is outstripping population growth so per capita income has been on the rise. Nominal incomes are rising due to the high inflation," said D K Joshi, chief economist at Crisil. According to the World Bank classification, India is a lower middle-income country. At around Rs 36,000 a year - or $720 - this translates into average income of less than $2 a day.

Source :timesofindia.indiatimes.com