According to Bloomberg’s most recent calculations, India has surpassed the United Kingdom to become the world’s fifth-largest economy in late March 2022. This news came at a time when Prime Minister Modi urged the countrymen to resolve to become a developed country by 2047 during his 2022 Independence Day speech.
GS Paper 3: Indian Economy
Analyze the Indian economy’s performance over the past 75 years of independence. Has it managed to meet the initial anticipations? (250 Words)
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The Bloomberg report’s main points
- According to a Bloomberg report, 75 years after achieving independence at midnight, India now has a larger economy than its former colonial master.
- India is now the world’s fifth-largest economy o India has surpassed the United Kingdom to become the world’s fifth-largest economy. It is expected to be the third largest by 2029.
- Indian economy size
- Using the dollar exchange rate on the last day of the relevant quarter, the Indian economy in nominal cash terms was $854.7 billion in the quarter through March.
- The UK was $816 billion on the same basis.
India vs. the United Kingdom
- Population o This is one of the most significant distinctions between the two countries.
- India has a population of 1.41 billion as of 2022, while the UK has a population of 68.5 million. In other words, India has 20 times the population of the United Kingdom.
- Per capita GDP
- Because of the stark difference in population between the two countries, India’s GDP per capita is much lower.
- Poverty levels o At the beginning of the nineteenth century, the UK’s share of extreme poverty was significantly higher than India’s.
- However, even though India has made great strides in alleviating poverty, the relative positions have shifted.
- Index of Human Development
- On this front, experts believe India will still take a decade to catch up to the United Kingdom in 1980.
- UK HDI 2019 performance – 0.932 (score), very high category (HDI tier) India’s HDI 2019 performance – 0.645 (score), medium category (HDI tier).
- Universal Healthcare Coverage While faster economic growth and the government’s policy focus on healthcare schemes have markedly improved India since 2005, there is still a long way to go.
- According to an earlier State Bank of India report, India will overtake the United Kingdom as the fifth-largest economy as early as December 2021.
- According to the report, India’s GDP share of global GDP is now at 3.5%, up from 2.6% in 2014, and is expected to cross 4% in 2027.
This report’s main points
- According to the report, India’s trajectory since 2014 indicates that it will be the world’s third-largest economy by 2029.
- At the current rate of growth, India will surpass Germany in 2027 and, most likely, Japan by 2029.
- The Indian economy is expected to grow by 7-7.5% this fiscal year, whereas the UK economy has seen a sharp decline in growth and record high inflation.
- According to the most recent data, the Indian economy grew by 13.5% in the June quarter.
- The IMF has forecast India to grow by 7.4%. According to the IMF, India will continue to be the world’s fastest growing major economy