India’s Per Capita Income touches ₹1,14,710 in 2024–25
Per capita income in India has increased to ₹1,14,710 for FY 2024–25, as stated by the Minister of State for Finance in the Lok Sabha. But the jump in national average masks deep disparities across states — from Goa and Sikkim on top to Bihar and Uttar Pradesh lagging far behind.
Let’s break down what this number means for Indian taxpayers, small businesses, and consultants tracking economic indicators.
What is Per Capita Income?
Per capita income = Net National Income ÷ Population
It indicates the average income earned per person in a financial year. This metric is crucial for:
- Tax policy planning
- State-wise fiscal allocation
- GST compensation and devolution
- Measuring progress under schemes like PMGKY, DBT, etc.
Key Highlights: FY 2024–25 vs. Previous Years
| Financial Year | Per Capita Income (₹) | Growth Rate |
|---|---|---|
| 2024–25 (RE) | ₹1,14,710 | 7.5% ↑ |
| 2023–24 | ₹1,06,951 | — |
| 2020–21 (COVID) | ₹86,647 | —10.4% ↓ |
Source: MoS Finance reply in Lok Sabha citing MoSPI data
State-Wise Per Capita Income: Uneven Growth
Some states continue to outperform the national average, while others struggle.
| State | Estimated PCI (₹) | Above/Below National Avg |
|---|---|---|
| Goa | ₹4.93 lakh | 4.3x above |
| Sikkim | ₹4.17 lakh | 3.6x above |
| Delhi | ₹3.89 lakh | 3.4x above |
| Bihar | ₹31,454 | 72% below |
| Uttar Pradesh | ₹47,321 | 59% below |
Refer: mospi.gov.in for updated PCI data
What Does It Mean for Taxpayers?
Here’s why per capita income in India matters for your taxes and business:
- Income Tax Planning: PCI trends often influence slab revisions in Budgets.
- State Incentives: Low-PCI states may offer better subsidies, PLI schemes.
- GST Revenue Gap: States with low income levels often face GST compensation shortfalls.
- Economic Mobility: High PCI states attract migration, impacting compliance and PAN–GST mapping.
Expert View: Why PCI Doesn’t Reflect True Inequality
“Per capita income is an average — it hides income inequality. A state with high PCI could still have large poverty pockets,” says Prof. R. Nagaraj, Economic Policy Researcher.
So while Goa’s PCI is high, it doesn’t mean everyone there is earning in lakhs. Median income and Gini index are better inequality indicators.
PCI vs. Taxpayer Base: A Reality Check
Despite rising PCI:
- Only 8 crore+ PAN holders file ITRs out of 140 crore Indians
- Less than 1.5 crore pay actual income tax
- Most direct taxes come from metro clusters
This mismatch points to a narrow tax base, making compliance efforts crucial.
Practical Tip for CAs & Consultants
Track PCI trends state-wise. They help identify high-growth states where:
- GST registration demand is rising
- ITR filings are increasing
- Small business advisory opportunities exist
Use Efiletax tools to target these regions with focused campaigns.
FAQs on Per Capita Income
Q1. Does rising PCI mean higher taxes?
Not directly. But sustained PCI growth may lead to higher consumption, widening the GST and income tax base.
Q2. Is PCI used in Budget decisions?
Yes, PCI influences fiscal transfers to states, subsidy rationalisation, and even MPLADS-type schemes.
Q3. Why is there such a large gap between states?
Structural issues like industrialisation, migration, education, and infrastructure differences cause this disparity.
Summary
Per capita income in India rose to ₹1,14,710 in FY 2024–25, showing economic recovery. However, state-wise disparities persist, with Goa at ₹4.93 lakh and Bihar below ₹32,000. Understanding PCI trends helps in tax planning, compliance outreach, and business targeting for professionals and firms.
Conclusion: Income Grows, But So Should Awareness
The rise in per capita income in India is a positive signal — but it’s just one part of the picture. Tax professionals, consultants, and business owners must look beyond the headline number to assess economic health and compliance opportunities.