India has overtaken the UK to become the 5th largest economy in the world and this unprecedented moment has been welcomed by many industrialists, business tycoons and bankers. While this is indeed a great moment for every Indian, it is also important to understand that there are still miles to go. Ace Banker Uday Kotak, Managing Director Kotak Mahindra Bank He also commended India for achieving such an impressive milestone but also gave a reality check on the “population divisor”. Kotak wrote, “Proud moment for India to overtake our colonial ruler UK as 5th largest economy: India $3.5 trillion vs UK $3.2 trillion”.
“But the reality check of the population denominator: India: 1.4 billion vs UK.068 billion. So per capita Gross Domestic Product We at $2,500 versus $47,000. We have miles to go… let’s be at it!” added the veteran banker.
India’s population is 20 times that of the UK and hence its per capita GDP is lower.
This week, India overtook the UK to become the fifth largest country in the world Economy And according to IMF estimates, the US is now behind only China, Japan and Germany.
A decade ago, India was ranked 11th among the major economies while the UK was at fifth.
With a record dashing expansion in the April-June quarter, the Indian economy has now overtaken the UK, which has slipped to the sixth position.
The assumption that India will overtake the UK is based on calculations by Bloomberg using the IMF database and historical exchange rates at its terminal.
“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 USD 854.7 billion. On the same basis, the UK was USD 816 billion, A Bloomberg report said.
With India being the world’s fastest growing major economy, its lead over the UK will only increase in the next few years.
Meanwhile, a note by economists from SBI said that the Indian economy overtook the UK to become the fifth largest economy in the world in December 2021.
The note said, “… (India) is now the 5th largest economy. Interestingly, India overtook the UK as the 5th largest economy in December 2021 itself and not recently As claimed.”
In another latest report, SBI said that India will overtake Germany in 2027 and most likely Japan to become the third largest economy by 2029 and at the current growth rate.
India’s GDP expanded 13.5% in the April-June quarter, the fastest pace in a year to retain the world’s fastest-growing economy tag, but rising interest costs and the threat of a slowdown in major world economies. May slow down the pace in the coming quarters. ,
Growth, though lower than the Reserve Bank of India’s (RBI) estimate of 16.2 per cent, was driven by consumption and indicated a revival of domestic demand, especially in the services sector.
Pent-up demand after two years of pandemic restrictions is driving up consumption, exiting and spending. The services sector has witnessed a strong boom which will get a boost from the festive season next month.
But the slow growth of the manufacturing sector at 4.8 per cent is a matter of concern. Also, more imports than exports are a matter of concern.
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