Nominal per capita incomes in both India and Pakistan stand at just over $1200 a year, according to figures released in May and June of 2011 by the two governments. This translates to about $3100 per capita in terms of PPP (purchasing power parity
). Using a more generous PPP correction factor of 2.9 for India as claimed by Economic Survey of India 2011
rather than the 2.5 estimated by IMF for both neighbors, the PPP GDP per capita for Indian and Pakistan work out to $3532 and $3135 respectively.
Nominal per capita income of Indians grew by 17.9 per cent to Rs 54,835, or $1218, in 2010-11 from Rs 46,492 in the year-ago period, according to the revised data released by the government in May, 2011 as reported by Indian media
In June 2011, Economic Survey of Pakistan
reported that the nominal per capita income of Pakistanis rose 16.9 percent to $1,254
in 2010-11, up from $1,073 in 2009-2010.
Neither of these figures are adjusted for inflation which has been running in high single digits in India (about 9%
) and double digits in Pakistan (about 14%).
Economic Survey of Pakistan 2010-11 puts the nation's population at 177 million and nominal gdp at $222 billion. In terms of purchase power parity with the PPP correction factor of 2.5, it works out to $555 billion PPP GDP.
Looking at the increase in nominal GDP alone can be quite misleading in judging the health of any economy. Other indicators, such as real GDP growth and investments, show that the state of Pakistan's economy is very poor. The nation's GDP grew only 2.4% in real terms in 2010-2011. Domestic investment dropped to a 40-year low of 13.4% of GDP, and foreign direct investment (FDI) declined by 29 percent to $1.232 billion during July-April 2010-11 from $1.725 million in the same period a year earlier.
In addition to improved security environment
, Pakistan has an urgent need for serious economic reform, greater social justice and better governance
. Unless the PPP government acts to improve this situation, no amount of foreign aid, external loans and other help will suffice. The first step in the process is for the ruling elite to lead by example by paying their fair share of taxes and adopting less extravagant personal lifestyles to get Pakistan's fiscal house in order
Economic Survey of Pakistan 2010-11
Pakistan's Per Capita Income Exceeds $3,100 in 2010-2011
Pakistan's Story After 64 Years of Independence
India and Pakistan Contrasted in 2010
Oligarchs of India and Pakistan