India is now the world’s fifth-largest economy after overtaking the UK, according to the latest data from the International Monetary Fund (IMF). India’s former chief economic adviser expects the country to become the world’s third-largest economy by the 2030s.
India is the 5th largest economy in the world
India overtook the UK to become the fifth-largest economy, Bloomberg reported on Friday, citing IMF GDP data and historical exchange rates. According to this estimate, the former British colony took over the United Kingdom in the last quarter of 2021 and is now second only to the United States, China, Japan and Germany in terms of economic size. Ten years ago, India was the 11th largest economy in the world.
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 terms of cash.”nominalin the quarter to March was $854.7 billion. On the same basis, the UK is $816 billion,” the publication explains.
Many people in India rejoice at the news that the Indian economy is overtaking the British economy. Kartik Sharma, Member of the Indian Parliament, tweeted: “India emerged as the 5th largest economy in the world, overtaking the UK from its position. Under the development-oriented leadership of the Honorable PM Narendra Modi Ji, we have made India the 5th largest economy in the world.”
Dr Arvind Virmani, former chief economic adviser to the Indian government, expects India to become the world’s third-largest economy within this decade, based on current figures. Virmani was appointed India’s representative to the IMF in 2009. Commenting on the news, he told the ANI news agency:
Last year we were 6th out of around 40 billion & this is expected to happen in 2022. India is climbing the power ladder in terms of forecast value, we will be 3rd largest country in 2030s.
The IMF’s World Economic Outlook database shows India has surpassed the UK in dollars on an annual basis this year, with a GDP of $3.53 trillion, up from $3.38 trillion for the UK.
However, Kotak Mahindra Bank CEO Uday Kotak explained on Twitter that India has a population 20 times that of the UK and therefore has a lower GDP per capita. “It is a proud moment for India to dethrone Britain, our colonial ruler, as the 5th largest economy“, he wrote, adding that “population denominator reality check: India: 1.4 billion against 0.068 billion for the UK. Therefore, GDP per capita is $2,500 versus $47,000. “We have miles to go“.
According to government data, India’s economy grew 13.5% in the second quarter of this fiscal year – the fastest in the last four quarters, according to the country’s Office for National Statistics (ONS). Meanwhile, UK GDP rose just 1% in cash in the second quarter, but fell 0.1% when adjusted for inflation. The British pound has also underperformed against the US dollar against the rupee, with the pound down 8% against the Indian rupee this year.
Last month, Morgan Stanley said India could become the strongest economy in Asia in 2022-23. The global investment bank expects India’s growth to average 7% in 2022-23. “The economy is poised to run its best in over a decade as pent-up demand is releasedsaid the brokerage firm.Lower corporate taxes, Production Linked Incentive (PLI) schemes and India as a potential beneficiary of supply chain diversification will catalyze and support domestic demand, especially for investment.”
