📈 Economy of Bihar Chapter 3: Bihar Economy: an overview

Mod 4: 5.1.2 State Domestic Product: Inter-State Comparison & Regional Disparities

📖 Chapter 3 of 10 🧩 Module 4 of 12 ⏱️ ~5 min read 💡 10 MCQs
Topic Part 1 of 2
Per Capita Net State Domestic Product (NSDP) measures the average net economic value generated per citizen within a state over a financial year. It serves as the standard macroeconomic benchmark for assessing inter-state living standards and regional income convergence.


Macroeconomic Indicator Formula


Per Capita NSDP
=

Net State Domestic Product (NSDP)
Total Mid-Year Population




The National Statistical Office (NSO / MoSPI) compares state economic prosperity using Net State Domestic Product (NSDP) rather than GSDP because NSDP deducts capital asset depreciation, reflecting the true net purchasing power accrued per resident.

1. Inter-State Comparison Tiers (Constant 2011-12 Prices)


Major Indian states broadly cluster into three economic tiers based on their real per capita output:

Income TierRepresentative StatesConstant (2011-12) BaselineUpdated Profile (2022-24)Structural Characteristics
High-Income TierHaryana, Karnataka, Tamil Nadu, Gujarat, Maharashtra₹1,50,000 – ₹1,80,000+₹1,75,000 – ₹2,10,000+Formal manufacturing base, high tech service exports, low birth rates.
Middle-Income TierPunjab, Andhra Pradesh, Rajasthan, West Bengal, Odisha₹70,000 – ₹1,20,000₹85,000 – ₹1,35,000Balanced industrial-service mix with average population growth.
National AverageAll India Benchmark₹94,954₹1,06,000 – ₹1,15,000Benchmark threshold for regional convergence.
Low-Income TierUttar Pradesh, Jharkhand, Bihar₹31,000 – ₹58,000₹35,000 – ₹65,000High rural density, structural agricultural dependency, historical industrial deficits.

2. Relative Position of Bihar: Baseline vs. Updated Overview


ParameterBaseline Period (2019-20)Updated Official Data (2022-24)Key Economic Diagnosis
Bihar Per Capita NSDP (Constant Prices)₹31,287₹34,413 (2022-23) / ₹35,119 (2023-24)Real purchasing power per citizen after removing inflation.
Bihar Per Capita NSDP (Current Prices)₹44,801₹59,637 (2022-23) / ₹64,119 (2023-24)Nominal per capita income reflecting current market prices.
Highest State Benchmark (Haryana)₹1,80,026₹2,00,000+ (Constant) / ₹3,25,000+ (Current)Bihar's real per capita income is roughly one-fifth of Haryana's.
All-India Benchmark (Constant Prices)₹94,954₹1,06,000 – ₹1,12,000Real national per capita output benchmark.
All-India Benchmark (Current Prices)₹1,32,115₹1,72,000 – ₹1,85,000Nominal national per capita output benchmark.
Bihar PCI as % of India's PCI32.9%33.1% – 33.5%Consistently ranges around one-third of the national average.

3. Visual Scale: Real Inter-State Income Gap (Constant 2011-12 Prices)





Haryana (Top Ranked Major State)
₹1,80,026







Karnataka
₹1,61,931







All-India Average (National Benchmark)
₹94,954







West Bengal
₹71,757







Uttar Pradesh
₹45,648







Bihar (Only ~33% of National Average)
₹31,287







4. The Growth Paradox: Denominator Dilution Effect


Between 2013-14 and 2019-20, Bihar's PCI ratio to India's PCI marginally dropped from 33.2% to 32.9%, despite recording real GSDP growth above 10.5%. This contradiction is driven by the relationship between economic output and population growth:




Numerator: Economic Output

Bihar's real aggregate GSDP growth rate has remained high (>10.5%), consistently matching or exceeding national GDP growth rates.




Denominator: Demographic Expansion

Bihar experienced a 25.1% decadal population growth rate, significantly higher than the national decadal average of 17.6%.




▼


The Per Capita Dilution Outcome


When aggregate economic gains are divided across an expanding population base, the net per-person additions to real wealth remain diluted. Southern and western states with replacement-level fertility rates translate comparable economic growth into substantially faster per capita wealth gains.





5. High-Yield Facts for Exam Revision

* Publishing Body: The Central Statistical Organization (CSO), operating as the National Statistical Office (NSO) under MoSPI, compiles interstate per capita income tables.
  • Metric Selection: The NSO uses Per Capita NSDP rather than GSDP to evaluate interstate economic prosperity.

  • Top-Performing State: Haryana recorded the highest Per Capita NSDP among major states at ₹1,80,026 (constant 2011-12 prices).

  • The One-Third Benchmark: Bihar's Per Capita Income has consistently hovered around 31% to 33.5% of the national average.

  • Base Year: 2011-12 remains the benchmark base year for state domestic product constant series.
⭐ Key Points
  • Metric Selection: The NSO uses Per Capita NSDP rather than GSDP to evaluate interstate economic prosperity.
  • Top-Performing State: Haryana recorded the highest Per Capita NSDP among major states at ₹1,80,026 (constant 2011-12 prices).
  • The One-Third Benchmark: Bihar's Per Capita Income has consistently hovered around 31% to 33.5% of the national average.
  • Base Year: 2011-12 remains the benchmark base year for state domestic product constant series.
📌 One-line Q&A
  • Metric Selection: The NSO uses Per Capita NSDP rather than GSDP to evaluate interstate economic prosperity.
  • Top-Performing State: Haryana recorded the highest Per Capita NSDP among major states at ₹1,80,026 (constant 2011-12 prices).
  • The One-Third Benchmark: Bihar's Per Capita Income has consistently hovered around 31% to 33.5% of the national average.
  • Base Year: 2011-12 remains the benchmark base year for state domestic product constant series.
Questions 10 MCQs

Answer this question, then use Next.

Question 1: Which organization regularly publishes estimates of Per Capita NSDP for different states of India?

Correct Option: (C) Central Statistical Office (CSO)

Question 2: What was the Per Capita NSDP in Bihar in 2019-20 at constant (2011-12) prices?

Correct Option: (C) Rs. 31,287

Question 3: Which state recorded the highest Per Capita NSDP in 2019-20 at constant prices?

Correct Option: (B) Haryana

Question 4: What was the highest Per Capita NSDP recorded by Haryana in 2019-20?

Correct Option: (A) Rs. 1,80,026

Question 5: The ratio of Per Capita NSDP in Bihar to that of the entire country has remained a little above what percentage in recent years?

Correct Option: (C) 31 percent

Question 6: Between 2013-14 and 2019-20, the ratio of Bihar's PCI to India's PCI dropped from 33.2 percent to what?

Correct Option: (A) 32.9 percent

Question 7: What is the main reason for the marginal drop in the ratio of Per Capita NSDP between Bihar and India despite rapid GSDP growth?

Correct Option: (B) Higher growth rate of population in Bihar

Question 8: According to official CSO tables, what was the PCI of All India at constant (2011-12) prices in 2019-20?

Correct Option: (C) 94,954

Question 9: According to Table 5.1.3, what was the PCI of Bihar as a percentage of PCI of India in 2017-18?

Correct Option: (A) 30.4%

Question 10: According to Table 5.1.3, what was the Per Capita NSDP of Uttar Pradesh in 2019-20?

Correct Option: (C) 45,648
Question 1 of 10

Write your answer, then submit to see the correct answer.

Metric Selection: The NSO uses Per Capita NSDP rather than GSDP to evaluate interstate economic prosperity.

The NSO uses Per Capita NSDP rather than GSDP to evaluate interstate economic prosperity.

Top-Performing State: Haryana recorded the highest Per Capita NSDP among major states at ₹1,80,026 (constant 2011-12 prices).

Haryana recorded the highest Per Capita NSDP among major states at ₹1,80,026 (constant 2011-12 prices).

The One-Third Benchmark: Bihar's Per Capita Income has consistently hovered around 31% to 33.5% of the national average.

Bihar's Per Capita Income has consistently hovered around 31% to 33.5% of the national average.

Base Year: 2011-12 remains the benchmark base year for state domestic product constant series.

2011-12 remains the benchmark base year for state domestic product constant series.