Miles to go

Recently, a section of the Indian media and population were seen celebrating the report that India is overtaking the United Kingdom to become the world’s fifth largest economy. However, 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 database of the IMF 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 celebration of India’s independence from the colonial masters. It offers an indication of steady progress, which needs to be consolidated and built upon. But the supporters of the ruling party and its friends in the media are celebrating as if India is now more developed than the UK, which is wrong. The ground reality is very different. The UK is way ahead of us in so many fields and India still has miles to go.