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Define Growth Rate. How it can be calculated? |
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Answer» Growth rate is that percentage rate from which it is known that in comparison to one year how much percentage change has taken place in national income or per capita income in any other year. Growth rate is calculated by using the following formula: Per Capita Income Growth Rate = \(\frac{Change\, in\, Per\, Capita\, Income }{ Original\, Per\, Capita\, Income}\) × 100 The calculation of growth rate may be made clear with the help of an example. Suppose in 2001 the per capita income of India was ₹ 10,000 and it increased to ₹ 12,000 in 2002. Clearly, the change in per capita income = 12,000 – 10,000 = ₹ 2000. Initial Per Capita Income = ₹ 10,000 Growth Rate of Per Capita Income = 2000 / 10,000 × 100 = 20% Thus Growth Rate of Per Capita Income = 20%. |
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