Economic growth and Indian wealth-income ratios in the long run, 1860-2018

47 Pages Posted: 5 Feb 2018 Last revised: 27 Sep 2022

Date Written: March 28, 2019


This paper presents new series on the evolution of wealth-income ratios in India. I construct a new macro-history dataset, covering the period 1860- 2018 and containing historical series on national wealth and its components, national income, savings, investment and prices. These data show a gradual rise in India’s national wealth-to-national income ratio (β) since the mid- twentieth century, with the main takeoff occurring since the 1980s. This recent rise in β is concurrent with India’s transition to a high-growth emerging economy, characterized by capital accumulation and growing importance of a modern sector. Prior to this period (1900-1980), the Indian economy struggled to hit growth rates over 1-2 percent per-capita and wealth-income ratios varied inversely with economic growth. At low growth rates, regardless of the level of development, wealth-income ratios are more sensitive to relative asset prices. On the basis of these findings, I propose a turning point in the relationship between β and economic growth which explains the simultaneous rise of wealth-income ratios in both slow growth (rich) and high growth (emerging) economies since the late twentieth century.

Keywords: India, Economic growth, Wealth-Income ratio, National wealth, Inequality, Economic Development

JEL Classification: E10, D30, D31, N15, O11

Suggested Citation

Kumar, Rishabh, Economic growth and Indian wealth-income ratios in the long run, 1860-2018 (March 28, 2019). Available at SSRN: or

Rishabh Kumar (Contact Author)

UMass Boston

100 Morrissey Blvd.
Boston, MA 02125
United States


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