Archive · 30 Jul 2025
Income Disparities in India: Why Some States Thrive
Some states in India are getting richer faster than others.
Per capita income, which is the average income per person, shows big differences.
Gujarat has the highest, while Bihar has the lowest.
The country's average income is growing, but some states are growing much faster because they have more manufacturing and service industries.
There's a decline in the differences in income among states over time.
Better governance and making it easier to do business can help states grow more quickly.
Gujarat's per capita income is the highest among major states; Bihar's is the lowest.
India's real per capita income grew at an average annual rate of 5.8% from 2014-15 to 2024-25.
States with expanding manufacturing and service sectors have seen the most benefit from economic reforms.
Real per capita income growth varies significantly across states.
The variation in real per capita income among states is decreasing over time.
- Who
- Indian states, with varying rates of economic growth.
- What
- Disparities in per capita income growth among Indian states.
- When
- Real per capita income estimates are available up to 2023-24, with projections to 2024-25.
- Where
- India, with a focus on states like Gujarat and Bihar.
- Why
- Differences in economic reform impacts and sector growth lead to varied PCI growth.
Government Policies
Economic Reforms
Governmental Impact
Government Policies
Governmental policies and the ease of doing business play a key role in income growth.
Economic Reforms
The impact of such policies vary in effect, as evidenced by the income disparities.
- Gujarat PCI (2023-24)
- Rs 1,95,617
- Bihar PCI (2023-24)
- Rs 32,227
- National PCI growth (2014-15 to 2024-25)
- 5.8% annual average
- States doubling PCI since 2011-12
- Gujarat, Karnataka, Tamil Nadu, Odisha, Andhra Pradesh, and Telangana
- Coefficient of variation (real PCI growth 2013-14)
- 0.91
- Coefficient of variation (real PCI growth 2023-24)
- 0.24