Many times I come across a few questions — why is the per capita income of India is so low? Is there too much poverty? Are people suffering in India? What about the living standard? These are very legitimate questions if we have read about India's very low per capita income.
On the flip side of per capita income sits India's GDP which is fourth or fifth in the world. And it's not just symbolic of a vast population, it's happening in real. Now India's development in a few areas is almost at par with the standards of Europe and North America. You can surely witness this incredible growth in infrastructure, services, and retail. India is also making a rapid progress in other sectors, now definitely keeping pace with the developing world.
But what about the questions? Why so low per capita income? What is the meaning of all this growth? Indians were poor and they are still poor.......
Alright, enough!
India is still a land of villages. There are about 65% of Indians who are stiil living in villages. I believe this is a big reason why Indians are earning enough (not suffering for money). The people in Indian villages are very self sufficient and generally they do not cry for money because of the traditional values that are still robust.
One of these values is living together in a combined family. This helps in eradicating a lot of need for money from everyone's life. For example noone here requires to buy a seperate house to live alone or with a wife or childreen. Living together also helps in many other ways like people don't hire for kitchen, gardening, babysitting and for so many other household work.
Offsetting costs is not the only advantage of a combined family, there's more money pour in the family for the family. All men work, some even go to big cities in their youth to earn extra. They take jobs or do some business and send money whatever they can back to their village. All what they all earn is used in the welfare of the whole family than just making prosperous 2-4 people. So India in fact doesn't have, in general, a per caita income, it actually has a per family income which comes from multiple sources - jobs, business and agriculture.
It means that Indians are self sufficient and they don't want more money, so the low numbers of per capita income are absolutely correct?
No, they are absolutely bullshit! They are fake and just based on a mere approximation which do not consider many aspects, such as....
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No villager pays tax to government as agriculture is absolutely exempted out of taxation, they hide their income.
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All HUFs (Hindu Undivided Families) are out taxation for doing a business of small or medium scale.
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All of those involved in Petty business, like small shops or individual services, hide their income. Oh this is big, it's called unorganised sector. I don't have latest numbers but 15 years ago it was 90% in and now it must be anywhere between 70-80% employment in the unorganised sector. So basically most of Indians hide their income and expenses.
- Yes, Indians also can hide their expenses easily because people easily buy gold or silver with their savings off the record. What about law? There are laws but there's a lot of untraced gold or other precious metals readily available in India. Let me add some weight to my words..
India's affinity for gold is not just cultural—it's monumental. As of 2025, Indian households collectively possess an estimated 25,000 tonnes of gold, making them the largest private holders of the precious metal globally. This staggering amount surpasses the combined gold reserves of the world's top 10 central banks, including those of the United States, Germany, and China.
You look astonished??
Yeah I'm, kinda. I think you're right. I can confirm I've seen many times that Indian women are always laden in Gold.
Yeah they are, they love it more than anything else. Let me just make "25000 tonnes of Gold" a little more credible.
Female population in India = 700000000
To reach to 25000 tonnes only 1/3 of these ladies need to have 3.5 ounce of Gold each. Is itba big deal?
On Thinking Deeply: 'I doubt the figure is much higher because all of the ladies I know at least have more than 7 ounce of Gold — one necklace, 4 Bengals, 2 earrings, 2 to 3 rings, one nosepin, one nose ring, and one Tika — because this is the least we gift to the girl when we marry. When I married it all went more than 10 ounces. At one point I thought I was robbed but it all got compensated in the end!
So any data about India's per capita income being so low is nothing close to reality.