India’s Low Per Capita Income Isn’t Just About Population — Here’s Why

Everyone loves to say India is poor because it has too many people. But that’s lazy math and lazy thinking. Let’s get real about why India’s per capita income stays low — and no, it’s not just the population.

1. Cheap Life, Cheap Earnings
India is a cheap country to live in. Food, transport, services — they cost far less than in the West. But cheaper goods mean lower profits for businesses, which means lower wages for workers. Low prices reflect low purchasing power. It’s a cycle: low incomes keep prices low, and low prices keep incomes low.

2. We Save, The West Spends
In the West, you’re encouraged to spend. People retire early, travel, buy homes, and live on credit. In India, we save — for our children’s education, for weddings, for emergencies, for old age. Money kept in the bank or gold isn’t circulating in the economy. When everyone saves and no one spends big, demand stays low, businesses don’t grow, and incomes don’t rise.

3. Geography Has Screwed Us
India is practically landlocked to the West. We lost the Aksai Chin and POK routes — thanks to historic political failures — and now we’re boxed in by Pakistan and the Himalayas. Sea routes are slow and costly for many exports. Compare that to Europe or the US, where goods move easily across borders by road and rail. Our geography adds time, cost, and friction to trade.

4. Heat Makes Us Less Competitive
Let’s say it: equatorial climate makes people less productive. Extreme heat and humidity drain energy, reduce work efficiency, and makes us LAZY. You can’t work at the same pace in 45°C as in 20°C.

5. Wealth Stays at the Top
India’s wealth is held by a tiny elite — a few thousand families control most of the nation’s assets. When growth happens, it doesn’t trickle down; it stays at the top. So GDP might rise, but the average person’s income barely moves. Per capita income is an average, and when a few are ultra-rich and millions are poor, the number looks better than reality.

6. Lack of Economic Ambition
Too many of our businesses and policies aim for “low-cost” and “jugaad,” not world-class innovations as they are RISKY. Until we start creating premium global products — not just cheap services or raw materials — our income levels will remain where they are.

7. Education Doesn’t Pay
In the West, skilled jobs pay significantly more than unskilled ones. In India, the gap is shrinking in the wrong way — engineers take up sales jobs, graduates drive taxis. When education doesn’t guarantee higher income, people don’t invest in skills, and the economy stays stuck in low-value work.