The growth rate of per capita income at current prices is higher than that of per capita income at constant prices, because the latter takes into account the rate of

Per capita income at current prices (nominal) reflects changes in both the quantity of output/income and the prevailing price level; hence its growth includes inflationary price increases. Per capita income at constant prices (real) is computed by valuing goods and services at a fixed base-year price so that changes reflect only volume/output movements and exclude price (inflation) effects. Therefore, when prices rise, growth measured at current prices will exceed growth at constant prices because the latter adjusts for the increase in the price level (inflation) and removes that component from measured growth [2].

Sources

1. [1] Macroeconomics (NCERT class XII 2025 ed.) > Chapter 2: National Income Accounting > 2.4 NOMINAL AND REAL GDP > p. 29
2. [2] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 1: National Income > Real versus Nominal GDP > p. 7