India holds the tag of the world's fifth-largest economy.
For the Prelims: Gross Domestic Product (GDP), per capita GDP, Universal Health Coverage (UHC) Index, and Human Development Index.
For the Mains: Growth and Development in the Indian Economy.
India just surpassed the United Kingdom to become the world's fifth largest economy. The only countries with economies greater than India's are the United States, China, Japan, and Germany.
In an unpredictable world, real GDP growth of 6-6.5% is the new normal, and India is on track to become the third biggest economy by 2029.
What are the key aspects of this achievement?
Passing one of the world's largest economies, particularly one that ruled over the Indian subcontinent for two centuries, is a significant achievement.
In the quarter ending March 2022, the Indian economy was worth USD 854.7 billion in "nominal" cash terms, whereas the UK economy was worth USD 816 billion.
When compared to the United Kingdom:
Size Of the population:
India has a population of 1.41 billion as of 2022, whereas the UK has a population of 68.5 million.
Per capita GDP:
- GDP per capita allows for a more fair comparison of income levels since it divides a country's GDP by its population.
- India's per capita income remains quite low; in 2021, India is ranked 122 out of 190 nations in terms of per capita income.
- Low per capita earnings frequently indicate high levels of poverty.
- At the turn of the nineteenth century, the United Kingdom's percentage of severe poverty was far greater than India.
- Despite significant progress in alleviating poverty in India, the relative positions have shifted.
- The Universal Health Coverage (UHC) Index is based on average coverage of basic services such as reproductive, maternal, neonatal, and child health, infectious illnesses, noncommunicable diseases, and service capacity and access; and is scaled from 0 (worst) to 100 (best).
- While greater economic growth and the government's policy focus on healthcare programs have markedly improved India since 2005, there is still a long way to go.
The Index of Human Development:
- Higher GDP and quicker economic growth ultimately aim to improve human development metrics.
- According to HDI (2019), the UK has a score of 0.932, whereas India has a score of 0.645, which is considerably behind the UK.
- Despite its long-term progress, India may yet take a decade to catch up to the United Kingdom in 1980.
- The drastic change has been fueled by India's tremendous economic development over the last 25 years, as well as falls in the value of the pound over the last year.
- The correct policy perspective and realignment in global geopolitics might lead to an upward adjustment in India's expectations.
What are the issues concerning the Indian economy?
Slowing Exports and Rising Imports: The manufacturing sector's 4.8% growth rate is cause for concern.
Furthermore, the fact that imports outnumber exports is a cause for concern.
An inconsistent monsoon is expected to affect both agricultural growth and rural demand.
Inflation has been rising steadily at a steady rate of roughly 6% for the past seven months.
- Higher energy and commodity costs are expected to weigh on consumer demand as well as corporate investment plans in India.
What is GDP (Gross Domestic Product)?
GDP (Gross Domestic Product) is the total monetary or market worth of all completed products and services produced within a country's boundaries in a certain time period.
It serves as a complete assessment of a country's economic health since it is a wide measure of entire domestic production.