In India, cities are bastions of relative wealth. Latest statistics reveal that Delhi’s per capita is now nearly three times as much as the national average.
The city’s per capita income, now at $3,154, rose 7.7 per cent over last year, according to the preliminary estimates made by the Delhi government. While the figure is still very low when compared with other emerging economies – China for example has a per capita income of $10,378 – the figure indicates real wage growth in the city.
“There has been a tremendous rise in incomes the last year, and it is not so much by food or fuel inflation but a large increase in wages for a range of occupations especially among the lower segments. Examples include construction workers, domestic workers,” said Laveesh Bandhari of Indicus Analysis, a Delhi-based economic research consultancy.
The city, now home to 18.3m people, has increasingly been getting wealthier. The capital’s real income is at par with Mumbai, the financial centre of the country and India’s most expensive city to live in, according to Bandhari.
The capital has benefited significantly from the construction boom over the past few years, especially as new hotels, stadia, flyovers and additional metro lines were added n the preparation of the commonwealth games last year. Real estate and finance activity grew 22.6 per cent over last year to become the biggest contributors to the city’s GDP, adding 39.7 per cent or $22.7bn to the total GDP of $57bn.
While the games were a one-off, adding to the demand for labour in the city, there is also a dearth of well-trained professionals contributing to a rise in incomes, explained Bhandhari.
But this increased affluence is also creating wide- spread disparity, with a greater share of income growth accruing to the top. Most of the city’s residents are employed in the services industry, said Bandhari. These tend to be lower-paid unskilled jobs where the competition for jobs is high, especially as the city continues to attract migrants from the neighbouring states of Uttar Pradesh and Bihar.
“The rate [of income growth] is highest at the top, followed by the bottom, and the mid segments are lowest. Sort of like a U-shape,” added Bandhari.
The city has also means a rise in the consumption, adding to the cost of living.
On the higher end of the spectrum, increased affluence has contributed to a growth in the number of restaurants. Le Cirque, the New York based French restaurant, is set to open in Delhi next month. The restaurants industry grew 14 per cent over last year and now contributes 18.7 per cent to the city’s GDP.
Lured by the prospect of higher incomes, the city continues to attract migrants from country’s rural areas, and this trend is only set to continue in the future, swelling Delhi’s population and, hopefully, the wages of the incoming hopefuls.
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