Comparing income growth rates of each quintile in India

Abstract

In the past 30 years, the global gross domestic product1 grew from $22.5 trillion in 1990 to $80 trillion in 2017. During the same period, India’s GDP grew from $316 billion in 1990 to more than $2.5 trillion in 2017. This meteoric rise in India’s GDP is attributed partly due to the rapid growth of industry, primarily the tertiary sector, combined with protectionist policies2 during the depression periods which saved the country from major damage and helped the economy recover quickly. This strong growth was also witnessed in then developing country China, which now has turned into a global power. Again, the strong growth here can be attributed to the increase in the Manufacturing Industry boosted by the policies of successive governments. Many other developing countries also witnessed fast rates of growth, while some of the larger countries stagnated on their rates of growth, with the US averaging at around 4.4% growth per year between 1990 and 2017. In the same period, India witnessed a compounded annual growth rate of around 8% while China saw a growth of around 14% CAGR.