State-level race in per capita income

Per capita net national product (NNP) — that is, net domestic product (NDP) plus net foreign income — at factor cost at current prices, which was only %255 in 1950-51, increased to %169,496 in 2022-23.

- ASHOK KUMAR LAHIRI

India graduated from a low-income to a low-middle-income country in 2007. Yet, in 2025, India’s per capita gross domestic product (GDP), at $2,937, was still only 3.3 per cent of that of the United States and 21.2 per cent of China’s.

India, which lives in its 28 states and eight Union Territories (UTs), needs to persevere to become a developed country. It can have higher per capita income only when its states and UTs prosper. Here we focus on only how the 28 states, where 97 per cent of Indians live, have done from 1980-81 to 2023-24. Data availability dictated the choice of the period and restricted the analysis to Net State Domestic Product (NSDP) at factor cost at current prices — that is, income originating in the state and not income accruing to the state.

So, what has been the relative performance of the states in terms of ranking of per capita NSDP? Some have raced ahead. For example, Sikkim, which ranked 10th-12th in the first half of the 1980s, jumped to second position in 2009-10 and even displaced Goa as number one in 2021-22. Goa has always stayed ahead of all the others, except in 2021-22. Some have languished at the bottom — for example Bihar, with its per capita NSDP the lowest in both 1980-81 and 2023-24. ‘There is no clear tendency of convergence—that is, poorer states catching up with their richer counterparts.

Grouping the states region-wise, we find that the South, consisting of Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and Telangana, improved their ranks, on average by 5.4. The stars among these five are Karnataka and Tamil Nadu. Karnataka rose rapidly in rank from 2011-12.