Editorial: Avoid jingoistic cheers
One should not lose track of the harsh ground realities. India’s per capita GDP is less than half the average for the world.
The reports of India overtaking the United Kingdom to become the world’s fifth largest economy are comforting, but one should not be carried away by the jingoistic cheers emanating from certain quarters. One should not lose track of the harsh ground realities. India’s per capita GDP is less than half the average for the world. The country fares poorly on the human development index with malnutrition and hunger being major areas of concern. An excessive exuberance is not warranted. The GDP figures, aggregate or per capita, do not, however, fully capture the economic power of a country. India has a population 20 times that of the UK and therefore its GDP per capita is much lower, indicating high levels of poverty. India has a long way to go before we can take comfort in economic statistics. However, the growth trends have been satisfactory. The assumption of India overtaking the UK is based on calculations made by Bloomberg using the IMF database and historic exchange rates. On an adjusted basis and using the dollar exchange rate on the last day of the relevant quarter, the size of the Indian economy in ‘nominal’ cash terms in the quarter through March was $854.7 billion as against Britain’s $816 billion. The timing of the report could not have been more symbolic as it coincides with the platinum jubilee celebrations of India’s independence from the colonial masters. It offers an indication of steady progress, which needs to be consolidated and built upon.
India’s share in global GDP has now touched 3.5%, as against 2.6% in 2014 and is likely to cross 4% in 2027. The Indian economy is forecast to grow at 7-7.5% in the current fiscal while the UK economy has been battling a sharp slide in growth and a record high inflation. A decade ago, India ranked 11th among the largest economies, while the UK was 5th. According to the IMF data, India ranks behind the United States, China, Japan and Germany in terms of the size of its economy in ‘nominal’ cash terms. However, rising interest costs and the looming threat of a recession in major world economies may slow the momentum in the coming quarters. The objective of higher GDP and faster economic growth is to have better human development parameters. India needs to improve its standing as far as the Human Development Index, a composite of health, education and standard of living parameters, is concerned. Despite some progress made over the years, India might still take a decade to be where the UK was in 1980. While faster economic growth and the government’s policy focus on healthcare schemes have made a distinct improvement for India, there is still a long way to go.
