- Recently, India became the world’s fifth largest economy by overtaking the United Kingdom. Now, the United States, China, Japan, and Germany are the only nations with economies larger than India’s.
- The real Gross Domestic product (GDP) growth of 6-6.5% in a world full of uncertainties is the new normal and India is set to be the third largest economy by 2029.
Key Highlights of this Achievement
- Moving past one of the biggest economies in the world, especially one that ruled over the Indian sub-continent for two centuries, is a major milestone.
- The size of the Indian economy in ‘nominal’ cash terms in the quarter through March, 2022 was USD 854.7 billion while for UK was USD 816 billion.
- As of 2022, India has a population of 1.41 billion while the UK’s population is 68.5 million.
- GDP per capita provides a more realistic comparison of income levels because it divides a country’s GDP by the population of that country.
- The per capita income in India remains very low, India is ranked 122 out of 190 countries in terms of per capita income in 2021.
- The low per capita incomes often point to high levels of poverty.
- At the start of the 19th century, the UK’s share in extreme poverty was considerably higher than India’s.
- However, the relative positions have reversed even though India has made giant strides in curbing poverty.
- The Universal Health Coverage (UHC) Index is measured on a scale from 0 (worst) to 100 (best) based on the average coverage of essential services including reproductive, maternal, newborn and child health, infectious diseases, non-communicable diseases and service capacity and access.
- While faster economic growth and the government’s policy focus on healthcare schemes since 2005 have made a distinct improvement for India, there is still a long way to go.
Human development Index:
- The end goal of higher GDP and faster economic growth is to have better human development parameters.
- According to HDI (2019), the UK score is 0.932 and India’s score is 0.645 which is comparatively far behind the UK.
- Despite its secular improvement, India might still take a decade to be where the UK was in 1980.
Issues Related to Indian Economy
- The slowing growth of the manufacturing sector at 4.8% is an area of worry.
- Also, imports being higher than exports is a matter of concern.
- There is an uneven monsoon that is likely to weigh upon agriculture growth and rural demand.
- There has been continuous rise in inflation about 6% for seven straight months.
- The Indian economy faces headwinds from higher energy and commodity prices that are likely to weigh on consumer demand and companies’ investment plans.
SOURCE: THE HINDU,THE ECONOMIC TIMES,MINT