India is world's fifth-largest economy, but has to outperform UK
In a significant achievement, India has surpassed the United Kingdom (UK) to claim the position of the 5th largest economy in the world, International Monetary Fund (IMF) said. The Indian economy was worth $854.7 billion in the March quarter, whereas the UK economy was worth $816 billion, Bloomberg reported. However, there are some key indicators where India needs to outperform the UK.
Why does this story matter?
Several factors, ranging from the COVID-19 pandemic to the Russia-Ukraine conflict, have put pressure on the Indian economy and impeded its progress. Despite these issues, the country's economy is rising steadily and outperforming forecasts. According to official figures, India's Gross Domestic Product (GDP) expanded by 13.5% in the April-June fiscal period, the quickest in the previous four quarters.
India ranked 11th a decade ago
According to the IMF, India was the world's 11th largest economy ten years ago. India surpassed France to become the world's sixth largest economy in 2017. United States, China, Japan, and Germany are currently ahead of India. While the UK economy is anticipated to contract this year, the Indian economy is expected to rise at a rate of 7%.
Population of India 20 times that of UK
The magnitude of the populations in India and the UK is one of the most important distinctions. India has 1.41 billion people as of 2022, compared to the UK's 68.5 million people. Therefore, India has a population that is 20 times larger than the UK. According to Bloomberg, it's unlikely that this gap will be closed very soon.
Average per capita income below $2,500 in India
According to Bloomberg, the UK and India have a large population disparity, which is why GDP per capita gives a more true comparison of income levels because it divides a country's GDP by its population. Quoting the World Bank figures, the report said that the average Indian's income ($2,500) is significantly lower than that of individuals residing in the United Kingdom (over $40,000).
Some optimism about yearly GDP levels
The UK's nominal GDP for the April-June quarter was $763 billion, much below India's $823 billion GDP. India's GDP actually surpassed that of the UK in just the January-March quarter. IMF estimated India's GDP to be $3.18 trillion in 2021, slightly shy of the UK's $3.19 trillion GDP. It also said that India was expected to exceed the UK in 2022.
UK's standard of living far better
High-level of poverty is sometimes indicated by low per capita earnings. As per Bloomberg, the UK had more people living in abject poverty than India during the early nineteenth century. It compared India with the UK's extreme poverty rates. However, given the current state of circumstances, the UK is today significantly better off than India, with a poverty rate of less than 2%.
UK fares better than India on human index
Better human development criteria might be seen as the ultimate objective of greater GDP and quicker economic expansion. Health, education, and standard of living indicators are combined to create the Human Development Index (HDI). If the HDI rankings of the two countries are compared, India comes in the medium range while the UK is still at a very high level.
India gaining but yet to surpass UK
The Universal Health Coverage (UHC) Index is measured on a scale from 0 (worst) to 100 (best). It's 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. As per official data, India has gained considerably but UK's score (around 90) is still much better than India's (around 70).
