Per Capita Income Is Not What Matters — Human Development Is

T. Chiranjeevulu IAS(ret), Founder and President BCIF (BC Intellectuals Forum)

 The argument we keep hearing these days is that over the last twelve years, the state of Telangana has achieved unprecedented economic development. Pointing to indicators such as Gross State Domestic Product (GSDP), per capita income, IT exports, industrial investment, and infrastructure construction, the ruling establishment describes Telangana as the fastest-developing state in the country. However, a crucial question arises here. Has this economic development truly reached all sections of society equally? Have the fruits of development reached every family, every caste, every region? If that is indeed the case, where do we stand on the Human Development Index?

There is a foundational principle in development studies: Economic Growth and Inclusive Development are not the same thing. A state may generate a great deal of wealth, but that wealth may not reach all sections of society, all regions, and all families equally. Therefore, it is not sufficient to assess development using only aggregate indicators like GSDP or per capita income.

Per capita income is simply the average obtained by dividing a state's total income by its total population. It is a key indicator used to assess the economic condition of a country or state. It shows the average income of people but does not fully reflect inequalities. Governments use it as a basis for policy decisions such as poverty eradication, fund allocation, and the design of welfare schemes. Investors also use it to assess market potential — investment tends to increase in regions with higher per capita income. It is also a key benchmark for comparing economic development between countries. For example, India today stands as the world's 6th largest economy with a GDP of about $4.15 trillion. (It previously held the 4th position; due to the recent fall in the rupee's exchange value against the US dollar, it slipped to 4th... [note: text states dropped to a lower rank]). However, when it comes to per capita income, the picture looks different. According to the latest IMF estimates, among roughly 194 countries/economies in the world, India ranks somewhere between 147th and 150th — meaning it is among the most backward nations by this measure.

Telangana's Rising Per Capita Income — Is It Real Development? An Analysis

When Telangana was formed in 2014–15, the state's per capita income was ₹1,24,104, while India's per capita income was ₹98,405. By 2025–26, Telangana's per capita income had reached ₹4,18,931, while India's reached ₹2,19,575. That means per capita income grew by about 337.56% in Telangana and 223.13% in India. Today, India ranks first nationally in per capita income terms [as stated in the source — likely meaning Telangana ranks first among states]. Based on these figures, the government claims Telangana is one of the fastest-developing states in the country. But a fundamental question arises here: Has this rise truly come from an improvement in people's standard of living? Or has the state average merely risen because of a few specific sectors, debt, a handful of districts, or a few sections of society seeing their incomes rise?

Per capita income across Telangana's various districts is shown in the table below [table not included in source text].

Income Concentrated Around Hyderabad — This income is mainly concentrated in the Hyderabad metropolitan area and districts like Rangareddy, Medchal–Malkajgiri, Sangareddy, Bhadradri Kothagudem, and Mahabubnagar. Sectors such as IT, pharma, corporate services, real estate, coal, and financial services have rapidly boosted the state's income. At the same time, agriculture-dependent districts, tribal areas, families dependent on rain-fed farming, and unorganized-sector workers have not seen their incomes rise at the same pace — this becomes clear when looking at the per capita income of the remaining districts. The per capita income of 20 districts is below ₹3 lakh.

After 2014, factors such as stable law and order in Hyderabad, rapid expansion of the IT sector, growth of the pharmaceutical industry, and increased agricultural output contributed to the rise in the state's GSDP and per capita income.

The rise in agricultural production is indeed a fact. However, it would be equally incorrect to attribute that growth solely to the government, and equally incorrect to say the government played no role at all. Factors that worked together to drive this growth include: 1. Expansion of irrigation. According to official Telangana government data: newly created irrigation potential — 13.67 lakh acres; stabilization of old ayacut (irrigated command area) — 2.10 lakh acres. Spending on irrigation was ₹1.81 lakh crore under the BRS government and about ₹70,000 crore under the current Congress government. On one hand, welfare schemes for the poor were sidelined while priority was given to a single sector — as a result, inclusive development did not take place. 2. Restoration of tanks/ponds. 3. Investment support schemes like Rythu Bandhu. 4. Free electricity. 5. Good rainfall. 6. Better seeds and mechanization. 7. Paddy procurement policy. At the same time, an increase in agricultural output and an equal rise in farmer welfare or rural family income are not the same thing. Even if output rises, factors like costs, price volatility, debt, and land-ownership inequalities determine farmers' actual economic condition.

Growth Built on Debt — Is It Sustainable?

We cannot ignore the role of massive government debt in Telangana's rising per capita income. According to a CAG report dated 31-03-2026, at the time the state was formed in 2014, Telangana government debt stood at about ₹91,985 crore. Of this, FRBM-limit debt was ₹69,517 crore, and debt outside FRBM limits was about ₹22,000 crore.

However, by 31 March 2025, government debt within the FRBM limit had grown to about ₹3,91,881 crore. In addition, debt taken on by Special Purpose Vehicles (SPVs) and government corporations under their own guarantees reached ₹2,41,528 crore — bringing the total to about ₹6,33,409 crore. Beyond this, opposition parties allege that unpaid bills to contractors, dues to DISCOMs, employee arrears, pending scholarships, and other payments add up to another roughly ₹2 lakh crore. Taking all these figures together, it becomes clear that the state's debt burden has grown roughly ninefold in the 12 years since the state's formation. Additionally, about ₹21 lakh crore has been spent through the budget over this period.

When government expenditure rises this much on the back of such massive borrowing, it is only natural that per capita income would rise somewhat as well.

Giving with One Hand, Collecting with the Other?

The Telangana government, on one hand, claims to be providing subsidies and cash transfers through welfare schemes, while on the other hand, it is raising enormous revenue through excise duty and VAT on liquor sales.

Budget figures indicate that in FY 2025–26, the state earned about ₹40,000 crore through excise and VAT. According to the CAG report dated 31-03-2026, in 2024–25 the state's own tax revenue was about ₹1.09 lakh crore. Of this, excise contributed ₹18,604 crore, and VAT contributed ₹31,816 crore — with an estimated ₹18,000 crore of that VAT coming from liquor alone. This means nearly a third of the state's own tax revenue comes from liquor-related taxes. A significant portion of the financial assistance the government provides through welfare schemes effectively flows back into the government treasury in the form of taxes on liquor consumption.

So Where Do We Stand on the Human Development Index (HDI)?

HDI is an index that assesses people's standard of living in a country or state, developed by the United Nations Development Programme (UNDP). This means that for a state or country to be considered developed, a rise in per capita income alone is not enough — balanced progress is needed across three areas: life expectancy, education level, and income. According to the latest Human Development Report 2025 (based on 2023 data): India ranks 130th among 193 countries in the world; its HDI value is 0.685; India falls under the "Medium Human Development" category.

According to the latest available sub-national HDI estimates: among 28 states plus 8 union territories combined, Telangana ranks 22nd. Considering only the 28 states, Telangana ranks 15th. According to the first comprehensive state report released after Telangana's formation, the Socio-Economic Outlook 2014, based on 2011–12 data, Telangana ranked 10th among 21 major states. Before that (2004–05), the same region ranked 13th. So what happened to development? Instead of our rank improving, why has it fallen? The rulers do not talk about this.

A Debate on the Quality of Development — Economist Amartya Sen argued that development should not be measured by income growth alone. Education, health, opportunity, a dignified life, and participation in decision-making are also measures of development. Viewed from this perspective, whose capabilities have actually expanded because of development in Telangana? Whose opportunities have grown? The plain truth is that it is the ruling and dominant castes who have benefited, while the Bahujans have gained little.

Likewise, Thomas Piketty's research on wealth concentration shows that even when economic growth occurs, if capital, land, businesses, and investments remain concentrated in the hands of a few, wealth inequality is likely to increase. That is exactly what has happened in Telangana. It must be said that today Telangana is among the states with the highest economic inequality in the country.

Telangana still has a critical gap: the state government does not collect data on per capita income, assets, land ownership, industrial ownership, government contracts, or bank loan distribution broken down by caste. While the SEEEPEC survey has provided some details, it is not a comprehensive survey — it is based merely on self-declarations, without third-party verification or official certification. Universities, too, have not conducted research on caste-wise per capita income. Without this information, it is difficult to scientifically determine which social groups have benefited from development, and to what extent.

Against this backdrop, claiming that "Telangana's development belongs to everyone" is simply false. The criteria used to measure development need to be redefined. Until now, we have focused heavily on aggregate indicators like GSDP, per capita income, investment, and exports. Going forward, indicators such as income distribution, regional equality, representation of social groups, asset distribution, quality employment, access to education, and equal availability of healthcare must also become part of how we measure development.

In a democracy, development does not simply mean creating wealth; it also means ensuring that the fruits of that wealth reach all sections of society justly. Growth limited to a few may be "High Growth," but it is not "Inclusive Development." This model of development is not the right one — it resembles Nehru's old "trickle-down" theory.

Therefore, what Telangana needs now is a development model centered on social justice. The state government should release an annual Social Equity Report detailing income, assets, education, employment, and the benefits of government spending, broken down by social group.

The debate on Telangana's development should not end with the question "How much growth have we achieved?" It must begin with the question "Who has received the fruits of that growth?" That is what true development means. That is genuine constitutional social justice. That is an inclusive, socially just Telangana.