The acceleration in India’s per capita income growth has been faster than in GDP growth, with decline in population growth being an important factor contributing to this trend, according to RBI Deputy Governor Poonam Gupta.
India’s population growth has traditionally been significantly higher than that of the world. However, over the years it has declined at a faster rate than the global rate and, since about 2014, at par with the growth rate in world population, she said in her speech at the 14th Foundation Day Lecture of the Centre for Development Studies (Thiruvananthapuram) on February 20, 2026.
“India has experienced a rapid decline in fertility rates since the 1980s. While the death rate has been declining too and has fallen below world average, the pace of decline in fertility rate has been faster than the decline in death rate, resulting in a slowing rate of population growth.
“These trends are indicative of the impact of increasing prosperity and education levels on demography. Going by international experience, these trends are likely to continue in the years to come, aiding a rapid increase in per capita incomes,” Gupta said.
Per capita income rises
The Deputy Governor noted that from a modest level of $274 in 1981, and $ 306 in 1991, India’s per capita income has increased nearly tenfold to about $2700 in 2024.
“From 1981, it took about 23 years to double the per capita income whereas in the subsequent 22 years it has increased almost five-fold. As per October 2025 forecasts in the World Economic Outlook of the IMF, per capita income is projected to increase to $2818 in 2025, $3051 in 2026 and $4346 in 2030,” she said.
Gupta observed that since the early 1990s, the Indian economy has been growing much faster than the rest of the world. As a result, the share of the Indian economy in the global economy has increased about 3 times, from about 1.1 per cent in 1991 to 3.5 per cent in 2024. The differential in growth rates has further widened in the last decade or so.
Meanwhile, India’s per capita GDP, as a percentage of world per capita GDP, has also increased threefold, from about 7 per cent in 1991 to close to 20 per cent in 2024. These are in current US$ terms; in Purchasing Power Parity (PPP) terms, India’s per capita GDP relative to world per capita GPD is much larger.
Looking at the pace of economic growth in India since the 1980s, it is easily observable that the Indian economy has slowly but surely accelerated, at the pace of 0.03 percentage points a year on an average, during the past four and a half decades, per Gupta.
While growth rate averaged 5.7 per cent during 1980s, it improved to 5.8 per cent in the following decade; to 6.3 and 6.6 per cent during the decades of 2000s and 2010s, respectively; and further to 7.7 per cent during the last four years, she added.
The Deputy Governor observed that ten-year rolling averages of annual GDP growth rate confirm the trend acceleration, as well as the fact that there have not been any periods of prolonged stagnation or secular decline in growth.
Gupta underscored that an economy is typically assessed to be macroeconomically stable if specific outcomes (commonly, inflation, current account deficit, fiscal deficit, quality of public debt and deficit, and those pertaining to the financial sector) are seen to be sustainable, growth supportive, and not indicative of excessive underlying risks or overheating.
For India, most of the aforementioned indicators have remained in a healthy range over the last four decades with notable improvement in recent years, she added.
The Deputy Governor highlighted that high, stable and accelerating growth, and more predictable economic outcomes have become the hallmarks of the Indian economy.
She emphasised that the Indian economy, with its macroeconomic stability, policy consistency, a large and diversified demand base consisting of domestic consumption as well as exports, and a diversified production base is assured of a continuously improving economic trajectory.
This is in contrast to a more modest economic promise of most other Emerging and Developing Economies, for they lack one or more of these enabling factors.
Published on February 24, 2026