Delhi’s per capita Gross Domestic Product (GDP) will cross the ₹5 lakh threshold in 2023-24 at current prices, according to advance estimates for the year released with the 2023-24 Economic Survey the Delhi government presented in the Delhi assembly on March 1. This will make it only the third state after Goa and Sikkim to cross the ₹5 lakh threshold of per capita GDP.
To be sure, it is better to make GDP comparisons in constant prices, as they adjust for inflation. At 2011-12 prices, Delhi’s per capita Gross Domestic Product (GDP) will cross ₹3 lakh for the first time in 2023-24. While last year’s Economic Survey made this claim for 2022-23, revised estimates show the Delhi’s per capita GDP that year was ₹4,656 shy of the ₹3 lakh threshold.
The per capita income in current prices, meanwhile, is expected to hit ₹4.62 lakh in 2023-24, according to the survey. In terms of 2011-12 prices, this figure is set to be ₹2.74 lakh in 2023-24 (advanced estimates).
But the performance of the trade, hotels, and restaurants sector in Delhi – largely on account of hotels and restaurants – is still below the pre-pandemic levels.
The advance estimates of Delhi’s economic output in 2023-24 show that the national Capital’s GDP will grow at 7.4% in the year in real terms, compared to 7.9% in 2022-23, 8.8% in 2021-22, and a 9% contraction in 2020-21. This suggests a moderation in growth after the low-base effect of the pandemic is over, in line with the all-India trend.
{{/usCountry}}The advance estimates of Delhi’s economic output in 2023-24 show that the national Capital’s GDP will grow at 7.4% in the year in real terms, compared to 7.9% in 2022-23, 8.8% in 2021-22, and a 9% contraction in 2020-21. This suggests a moderation in growth after the low-base effect of the pandemic is over, in line with the all-India trend.
{{/usCountry}}To be sure, Delhi’s real GDP has grown 14.7% in the four years since the pre-pandemic year of 2019-20. This is a slower growth rate than the all-India figure of 19% growth in the four years since 2019-20. A slower growth rate than the national GDP has been a regular feature of Delhi’s economy from 2016-17.
The recovery in Delhi’s GDP after the pandemic is, however, yet to pass through to the trade, hotels, and restaurants sector of the economy. This sector’s Gross Value Added (GVA) is 0.8% below the 2019-20 level in 2023-24. This makes it the only major sector of the economy that is still operating below the pre-pandemic level. Overall GVA and services GVA (trade, hotels, and restaurants are part of services) have grown 13.5% and 13.6% since 2019-20.
While two other sectors – agriculture, forestry, and fishing sector and mining and quarrying sector – are also below pre-pandemic levels, their combined share in Delhi’s GVA was small (2.8%) even in 2019-20. This share is now down to 1.6%. On the other hand, trade, hotels and restaurants sector had a significant share of 15.5% in 2019-20, which is now down to 13.6%.
While a direct comparison with the national figure for trade, hotels and restaurants sector is not possible, available data suggests that the sector’s performance in Delhi is in contrast with the national trend. National accounts data published on February 29 gives data for a broader group, including transport, storage, and communications in addition to trade, hotels and restaurants. All these sectors taken together have grown 9.9% since 2019-20 at the national level, but only 1.9% in Delhi.
To be sure, the trade part of the trade, hotels and restaurants sector in Delhi has reached pre-pandemic levels and is 1.9% above 2019-20 levels in 2023-24. It is the smaller hotels and restaurants component – which is 27% below 2019-20 levels – that is keeping the sector as a whole below pre-pandemic levels in Delhi.
The survey also shows that the subsidies of the Delhi government will contract in real terms for the third consecutive year in 2023-24. However, the contraction in 2023-24 is less than in the previous two years. Subsidies contracted 18.5% in 2021-22 and 12.9% in 2022-23, but are expected to contract by 9.3% in 2023-24. This is somewhat expected because subsidies grew at 50.8% in 2019-20 and 34.6% in 2020-21, likely on account of the Covid-19 pandemic.
The advance estimates for 2023-24 also come with revised estimates for the previous three years. Per capita GDP needs to grow by only 1.6% in 2023-24 for Delhi’s per capita GDP to cross the ₹3 lakh threshold compared to the survey’s estimate of a 5.4% growth in this number. To be sure, Delhi’s overall GDP is significantly higher than that of Goa and Sikkim.
Per capita net domestic product (NDP) is conventionally understood as average per capita income. NDP also takes into account depreciation of capital goods, which GDP does not. Delhi’s per capita income in 2011-12 prices is estimated at ₹273,687 in 2023-24. This is 2.54 times the national average of ₹107,932 as calculated by HT on the basis of mid-year population projections and national accounts data published on February 29. The survey has likely used an older estimate of national accounts, which shows Delhi’s per capita income in 2023-24 at 2.62 times India’s in real terms.