India’s rank on per capita income is a lowly 144
When the economy of India overtook that of the UK, Prime Minister Narendra Modi recently said, “We have surpassed those who ruled us for 250 years in economic growth.” Yes, India has overtaken the United Kingdom to become the fifth largest economy in the world. But when we deeply analyse and understand the entire economic indicators, we will realize how India is far away from the prosperity of not only UK but also many other countries, including many Asian countries.
India’s nominal GDP or GDP at the current price in the April-June quarter was Rs 64.95 lakh crore, which at the June rupee-dollar exchange rate comes to around $823 billion. The UK’s nominal GDP in the April-June quarter was $763 billion. According to IMF projections, India is likely to become a $5 trillion economy by 2026, whereas the UK would be languishing at $4.35 trillion. Germany’s economy was $4.2 trillion at the end of 2021. India is likely to surpass Germany and become the fourth largest economy in 2027, according to IMF projections.
Without comparing per capita GDP, just comparing GDP is meaningless and it leads to false self-satisfaction. It is similar to comparing the family income of two families without considering their dependents. For example, a family which consists of a husband and wife may have a monthly income of Rs 1 lakh and another family with six members may get Rs 1.20 lakh. In such a scenario, each member in the first family gets Rs 50,000, whereas in the second each gets Rs 20,000. Which family is prosperous here?
Now, let us analyse the data of the 10 biggest economies. In 2021, the GDP of the US was $23 trillion, growth 5.7 per cent, and per capita income. The corresponding figures for China were $17.7 trillion, 8.1 per cent, and $12,556; for Japan ($4.9 trillion, 1.6 per cent, and $39,285), Germany ($4.2 trillion, 2.9 per cent, and $50,801), the UK ($3.2 trillion, 7.4 per cent, and $47,334), India ($3.2 trillion, 8.9 per cent, and $2,277), France ($2.9 trillion, 7 per cent, and $43,518), Italy ($2.1 trillion, 6.6 per cent, and $35,551), Canada ($2 trillion, 4.6 per cent, and $52,051), South Korea ($1.8 trillion, 4 per cent, and $34,757).
India is at 144th position out of 194 economies in terms of GDP (nominal) per capita. India’s nominal per capita is over 60 times lower than the richest country and approximately eight times greater than the world’s poorest country. India is at 33rd position in the list of Asian countries.
The countries with real prosperity are the countries with the highest per capita GDP and the following are those countries. Liechtenstein $139100, Monaco $115700, Luxembourg $110300, Singapore $93400, Ireland $89700, Qatar $85300, Isle of Man $84600, Bermuda $81800, Cayman Islands $73600 and Falkland Islands $70800. When our present GDP per capita is $2277 and the Sing,apore’s GDP per capita is $93400, where are we and how much we have to catch up?
Even if we take into account the PPP adjusted figures, there is a wide gap between us and other prosperous countries. When we expect the world to measure coronavirus death in our county in terms of our population, we must also be willing to measure GDP in terms of GDP per capita and not by just GDP number. We have a long way to go.
(The author is a retired banker)
