According to Trading Economics global macro models and analysts, India’s GDP per capita is predicted to reach $1750.00 USD by the end of 2021. According to our econometric models, India’s GDP per capita will trend around 1850.00 USD in 2022 and 1920.00 USD in 2023 in the long run.
What is India’s current GDP per capita?
In 2020-21, nominal GDP per capita or GDP per capita at current prices is expected to be 145,679, down from 151,760 in 2019-20. GDP per capita for 2020-21 is 99,694 INR at constant prices (2011-12).
At current prices, India’s per capita net national income (NNI) is expected to reach 128,829 Indian rupees in 2020-21, up from 134,186 INR in 2019-20. In real terms (at 2011-12 prices), per capita income in 2020-21 is expected to be Rs. 86,659, down from Rs. 94,566 in 2019-20.
India’s GDP (nominal) per capita in 2021 is expected to be $2,191 at current prices, according to the IMF World Economic Outlook (April – 2021). In terms of nominal GDP per capita, India ranks 144th out of 194 economies. India’s GDP per capita was 6.45 percent of world GDP per capita in 1993; by 2019, it has increased to 18.4 percent. India’s nominal per capita income is nearly 60 times that of the world’s richest countries and almost eight times that of the world’s lowest. In the list of Asian countries, India is ranked 33rd.
According to PPP, India’s GDP per capita is expected to reach 7,333 US dollars in 2021. It accounts for over 40% of global GDP per capita. The Asian rank is 31 and the world rank is 128, respectively.
What will India’s GDP be in 2021?
In its second advance estimates of national accounts released on Monday, the National Statistical Office (NSO) forecasted the country’s growth for 2021-22 at 8.9%, slightly lower than the 9.2% estimated in its first advance estimates released in January.
Furthermore, the National Statistics Office (NSO) reduced its estimates of GDP contraction for the coronavirus pandemic-affected last fiscal year (2020-21) to 6.6 percent. The previous projection was for a 7.3% decrease.
In April-June 2020, the Indian economy contracted 23.8 percent, and in July-September 2020, it contracted 6.6 percent.
“While an adverse base was expected to flatten growth in Q3 FY2022, the NSO’s initial estimates are far below our expectations (6.2 percent for GDP), with a marginal increase in manufacturing and a contraction in construction that is surprising given the heavy rains in the southern states,” said Aditi Nayar, Chief Economist at ICRA.
“GDP at constant (2011-12) prices is estimated at Rs 38.22 trillion in Q3 of 2021-22, up from Rs 36.26 trillion in Q3 of 2020-21, indicating an increase of 5.4 percent,” according to an official release.
According to the announcement, real GDP (GDP) or Gross Domestic Product (GDP) at constant (2011-12) prices is expected to reach Rs 147.72 trillion in 2021-22, up from Rs 135.58 trillion in the first updated estimate announced on January 31, 2022.
GDP growth is expected to be 8.9% in 2021-22, compared to a decline of 6.6 percent in 2020-21.
In terms of value, GDP in October-December 2021-22 was Rs 38,22,159 crore, up from Rs 36,22,220 crore in the same period of 2020-21.
According to NSO data, the manufacturing sector’s Gross Value Added (GVA) growth remained nearly steady at 0.2 percent in the third quarter of 2021-22, compared to 8.4 percent a year ago.
GVA growth in the farm sector was weak in the third quarter, at 2.6 percent, compared to 4.1 percent a year before.
GVA in the construction sector decreased by 2.8%, compared to 6.6% rise a year ago.
The electricity, gas, water supply, and other utility services segment grew by 3.7 percent in the third quarter of current fiscal year, compared to 1.5 percent growth the previous year.
Similarly, trade, hotel, transportation, communication, and broadcasting services expanded by 6.1 percent, compared to a decline of 10.1 percent a year ago.
In Q3 FY22, financial, real estate, and professional services growth was 4.6 percent, compared to 10.3 percent in Q3 FY21.
During the quarter under examination, public administration, defense, and other services expanded by 16.8%, compared to a decrease of 2.9 percent a year earlier.
Meanwhile, China’s economy grew by 4% between October and December of 2021.
“India’s GDP growth for Q3FY22 was a touch lower than our forecast of 5.7 percent, as the manufacturing sector grew slowly and the construction industry experienced unanticipated de-growth.” We have, however, decisively emerged from the pandemic recession, with all sectors of the economy showing signs of recovery.
“Going ahead, unlock trade will help growth in Q4FY22, as most governments have eliminated pandemic-related limitations, but weak rural demand and geopolitical shock from the Russia-Ukraine conflict may impair global growth and supply chains.” The impending pass-through of higher oil and gas costs could affect domestic demand mood, according to Elara Capital economist Garima Kapoor.
“Strong growth in the services sector and a pick-up in private final consumption expenditure drove India’s real GDP growth to 5.4 percent in Q3.” While agriculture’s growth slowed in Q3, the construction sector’s growth became negative.
“On the plus side, actual expenditure levels in both the private and public sectors are greater than they were before the pandemic.
“Given the encouraging trends in government revenues and spending until January 2022, as well as the upward revision in the nominal GDP growth rate for FY22, the fiscal deficit to GDP ratio for FY22 may come out better than what the (federal) budget projected,” said Rupa Rege Nitsure, group chief economist, L&T Financial Holdings.
“The growth number is pretty disappointing,” Sujan Hajra, chief economist of Mumbai-based Anand Rathi Securities, said, citing weaker rural consumer demand and investments as reasons.
After crude prices soared beyond $100 a barrel, India, which imports virtually all of its oil, might face a wider trade imbalance, a weaker rupee, and greater inflation, with a knock to GDP considered as the main concern.
“We believe the fiscal and monetary policy accommodation will remain, given the geopolitical volatility and crude oil prices,” Hajra added.
According to Nomura, a 10% increase in oil prices would shave 0.2 percentage points off India’s GDP growth while adding 0.3 to 0.4 percentage points to retail inflation.
Widening sanctions against Russia are likely to have a ripple impact on India, according to Sakshi Gupta, senior economist at HDFC Bank.
“We see a 20-30 basis point downside risk to our base predictions,” she said. For the time being, HDFC expects the GDP to rise 8.2% in the coming fiscal year.
What accounts for India’s high GDP?
India’s long-term prosperity has been fueled by an increasing share of investment and exports, with consumption playing a significant role. Productivity advances both in labor productivity and total factor productivity have also characterized growth.
In India, how is GDP calculated?
- The GDP of India is estimated using two methods: one based on economic activity (at factor cost) and the other based on expenditure (at market prices).
- The performance of eight distinct industries is evaluated using the factor cost technique.
- The expenditure-based method shows how different aspects of the economy, such as trade, investments, and personal consumption, are performing.
What accounts for India’s low GDP?
There are two things that stand out. The Indian economy began to revive in March 2013 more than a year before the current government took office after a period of contraction following the Global Financial Crisis.
But, more importantly, since the third quarter of 2016-17 (October to December), this recovery has transformed into a secular slowing of growth. While the RBI did not declare so, many experts believe the government’s move to demonetise 86 percent of India’s currency overnight on November 8, 2016, was the catalyst that sent the country’s GDP into a tailspin.
The GDP growth rate steadily fell from over 8% in FY17 to around 4% in FY20, just before Covid-19 hit the country, as the ripples of demonetisation and a poorly designed and hastily implemented Goods and Services Tax (GST) spread through an economy already struggling with massive bad loans in the banking system.
PM Modi voiced hope in January 2020, when GDP growth fell to a 42-year low (in terms of nominal GDP), saying: “The Indian economy’s high absorbent capacity demonstrates the strength of the country’s foundations and its ability to recover.”
The foundations of the Indian economy were already weak in January last year well before the outbreak as an examination of key factors shows. For example, in the recent past (Chart 2), India’s GDP growth trend mirrored an exponential development pattern “Even before Covid-19 came the market, there was a “inverted V.”
Is Bangladesh a wealthier country than India?
Several indications show that Bangladesh is gaining ground on Pakistan, particularly on the social and economic fronts. Bangladesh’s inspirational target level of development success in the future would most likely be nations like Thailand, Malaysia, and Indonesia, and there is still a lot more work to be done to reach that level of development.
Many notable economic analysts, periodicals, and forums link Bangladesh’s current situation to that of India. India is not only Bangladesh’s closest neighbor and greatest economic partner, but it has also emerged as the country with the most similarities to Bangladesh.
Or perhaps a more appropriate way to put it would be to state that Bangladesh has progressed so quickly and achieved so much that it can now legitimately be compared to India in terms of economics and social development.
Is India, then, Bangladesh’s new rival? Yes, from certain views and economic perspectives, but no, in terms of many other comparisons.
Furthermore, this comparison is not so simple and has a number of subtleties and nuanced elements.
Several articles published in highly reputable Indian origin publications over the last year or so have provided an economic and social comparison between India and Bangladesh, and all of these articles have one thing in common: they conclude that Bangladesh currently outperforms India on many key economic indicators and social objectives.
This was not the case even five years ago, but it appears to be becoming a more common scenario in recent years. However, on a practical and honest basis, India remains far more dominant and strong than Bangladesh, although this is mostly due to India’s massive physical size, population, and natural resources.
Income and GDP
In theory, India has fallen behind Bangladesh in terms of per capita income, since Bangladesh just declared a per capita income of $2,227 for the 2020-2021 fiscal year, up about 10% from $2,064 in the previous fiscal year.
According to the most recent government data, India’s per capita income is $1,947, owing to a drop in India’s economic growth caused by the Covid-19 pandemic.
It is crucial to note that while Bangladesh’s economy has experienced rapid GDP growth since 2004, this rate did not significantly alter the relative status of the two economies between the mid-2000s and the mid-2010s because India’s economy grew faster.
However, India’s growth rate has slowed dramatically in the second part of the decade, while Bangladesh’s has accelerated even faster. Bangladesh’s quicker development rate is due in part to significant improvements in several social and political indicators such as health, sanitation, financial inclusion, and women’s political representation.
Countries are typically compared in economic terms based on their GDP growth rate or absolute GDP. On all measures, India’s economy has done better than Bangladesh’s for the most part since independence.
India’s economy has always been over 10 times the size of Bangladesh’s in terms of GDP growth rates and absolute GDP, and it has risen faster every year. According to recent International Monetary Fund projections, India will likely grow faster again soon, putting it ahead of Bangladesh. However, due to Bangladesh’s slower population growth and comparatively faster economic growth, the two countries are expected to be very close in terms of per capita income comparisons.
Size matters
Would India still be so much more dominant than Bangladesh if it were the same size, geographically, and in terms of people and resources as Bangladesh?
Based on how major financial, social, demographic, and economic variables are currently exhibited, the simple response could be “no.”
If India and Bangladesh were twins in terms of population, size, and resources, it would be clear that Bangladesh is the better-performing twin sister in the 2020s. This is further shown by the fact that, in 2020 and this has gotten everyone’s notice – the average Bangladeshi citizen’s per capita income was higher than the average Indian citizen’s per capita income.
So, the question is whether India and Bangladesh are comparable, and the answer is a complicated yes/no. The fact is that India has significantly more resources, capabilities, and strategic advantages than Bangladesh, owing to its larger geographic expanse and a population that is nowhere near as dense.
As a result, Bangladesh’s exceptionally high population density is continually at odds with its exceedingly limited resources. Bangladesh has no choice but to make the most effective and efficient use of its limited resources and territory.
This is a significant burden that India does not have to bear, giving it a significant competitive edge. For example, if one region of India is harmed by natural disasters or unforeseen events, it has a large pool of ready and available resources and the ability to pool them and manage them quickly and effectively.
Such incidences may or may not have a significant impact on the overall economic balance and standing of the country. Bangladesh, on the other hand, does not have that luxury because it lacks the enormous pool of readily available resources required to properly absorb a catastrophic calamity, and such sad events have befallen Bangladesh numerous times in the past.
Despite such setbacks, Bangladesh always manages to overcome and eventually thrive.
What can be done to mitigate and work with Bangladesh’s comparably tiny geographic size (especially contrasted to its massive population) so that the country may still go forward and become just as economically dominating, if not more so, than India?
Japan, Singapore, and South Korea are all much smaller than India, but despite their small geographic area, they have all had phenomenal economic growth and development. So, how might Bangladesh, like Japan, Singapore, and South Korea, one day completely and utterly overcome India?
For instance, consider India, which rose to prominence as a global economic powerhouse and a force to be reckoned with by upskilling its massive labor population and eventually attempting to become what is known as a knowledge-based economy.
Knowledge-driven economy
- Institutional institutions that encourage entrepreneurship and the application of knowledge
- A thriving innovation ecosystem that encompasses academics, business, and civil society
A knowledge-driven economy is defined by its products and services, which are propelled by knowledge-intensive rather than labor-intensive activities. The premise is that, rather than giving and employing low-skilled manual labor to generate money, such an economy uses knowledge and information to create goods and services.
A knowledge-based economy necessitates a competent labor force and a considerable portion of the population with excellent analytical ability and subject-matter expertise so that data can be manipulated and development can be achieved through research and invention.
In essence, a knowledge economy allows science and academia to be commercialized, which leads to research-based breakthroughs that are protected and backed by strong intellectual property regulations. The world economy has already changed to a knowledge economy in this information age, and if Bangladesh does not follow suit, it will be left far behind.
Because Bangladesh is still an agricultural and manual labor-intensive economy, and the level of skill of its labor force is not yet at the point where truly useful and viable informational analytics or unique technological innovations can be generated, India is far superior to Bangladesh in all of these aspects that define and make a knowledge-based economy.
India, on the other hand, today dominates the global technology industry and has achieved great progress in a variety of other knowledge- and skill-intensive industries, including medical, industrial production, business consulting services, and education.
The harsh reality is that Bangladesh is still a long way behind India in terms of knowledge-based economies. However, Bangladesh has the potential to become a knowledge-driven economy because it possesses the same core underlying elements as other knowledge-driven economies a huge young population ready to study, grow, and progress.
As a result, the concern now is how to promote better knowledge focus, skill acquisition, and technical competency among the young people.
The apparent solution is to place a greater emphasis on education, training, and skill development. The idea would be to encourage and inspire workers to move away from manual labor-intensive jobs and into higher-skilled and knowledge-based jobs.
Since India has reaped significant benefits by training its youth in technology-related fields, Bangladesh should be able to accomplish the same because it has the capability and resources to do so.
However, policymakers, legislators, and those in command must have a strong desire and drive to actively foster and promote a knowledge-based focus when it comes to future vocations, and such goals must then be instilled in the brains of the country’s adolescent population.
Furthermore, fundamental modifications to the country’s educational system would be required to actively enable and incentivize students to acquire the essential skills to update themselves.
Teachers and professors must also be continually trained and educated in order to stay current with the newest advancements in their fields in order to properly pass on that information and expertise to their pupils. Practical skills, rather than academic knowledge, should be emphasized, and originality and invention should be celebrated.
This is so that no one can quickly replicate or steal something that someone else has spent a lot of time and effort developing and creating. If intellectual property rights are not completely safeguarded and guaranteed, firms and individuals would lack the drive to research, develop, and come up with new inventions and technologies, and a knowledge-based economy will never be realized.
Bangladesh’s challenges
The fact that Bangladesh has reached a point in its development cycle where it is being compared to India is surely commendable. Considerable obstacles remain, however, and continue to erect significant barriers to Bangladesh becoming a true competitor to India.
One cause for concern is that Bangladesh’s poverty rate remains much higher than India’s. Poverty is anticipated to rise even more in the short term, according to the World Bank, with daily and self-employed workers in the non-agricultural sector and salaried workers in the manufacturing sector suffering the most.
Furthermore, Bangladesh continues to lag behind India in terms of basic education, resulting in a worse ranking in the Human Development Index.
A truly sustainable developed economy cannot be achieved while still experiencing high rates of poverty and a lack of educational advancement, pointing again to the importance of focusing more on a knowledge-based economy, which has the incredible potential to alleviate poverty while also improving education and literacy.
Bangladesh now falls behind other comparator nations in several measures for “ease of doing business,” and this is due to a lack of reforms and the government’s willingness to take steps to improve the situation.
Furthermore, Bangladesh’s ability to enhance its ease of doing business indices is nearly impossible due to widespread corruption when dealing with any government regulator or authority. Demanding payments from officials has become the norm, even for the tiniest of tasks.
Furthermore, as many important business leaders have often and loudly stated, running a business in Bangladesh remains extremely difficult. For example, some businesses require many licenses and permits from various regulatory organizations, which is incredibly time-consuming and inconvenient.
It’s almost as if the entire system has been designed to make it as difficult as possible for relevant authorities to accept bribes at every level. Bangladesh is unlikely to fall below 100 on the World Bank’s ease of doing business index anytime soon as a result of this.
Despite the fact that the Bangladesh Investment Development Authority was established with the express purpose of making it easier to do business in Bangladesh, it has so far been unable to control, coordinate, and collaborate with other regulatory bodies in order to achieve its goal of becoming a one-stop service center.
If the situation is to be improved, the Bangladesh Investment Development Authority should be given more authority and power to truly make a difference and to be able to override and control the entire process so that aspiring entrepreneurs do not have to spend so much time, money, and effort simply to be regulatory compliant.
If such difficulties are not addressed and resolved in the near future, Bangladesh will continue to fall behind and lose to its competitors, who are also aggressively competing for foreign investment, and who already rank far higher on the ease of doing business index than Bangladesh.
In this ranking, India currently ranks 63rd, whereas Bangladesh ranks 168th, which is extremely shameful.
Bangladesh’s resource
Bangladesh’s most valuable asset and resource is its people, and this is one natural resource that the country has in abundance. Since a result, one of the most essential objectives must be the development of its employees, as it is the ultimate key to future success.
Bangladesh’s continuous progress and expansion must not only be sustainable, but it must also be knowledge-based, as this is the most logical and practical path to becoming a fully developed country.
In 2030, what would India’s GDP be?
India is expected to overtake Japan as Asia’s second-largest economy by 2030, when its GDP is expected to surpass that of Germany and the United Kingdom to become the world’s No. 3, according to IHS Markit. India is currently the world’s sixth-largest economy, behind the United States, China, Japan, Germany, and the United Kingdom.
“India’s nominal GDP is expected to expand from $2.7 trillion in 2021 to $8.4 trillion by 2030,” according to IHS Markit Ltd. “With this rapid economic growth, Indian GDP would surpass Japanese GDP by 2030, making India the second-largest economy in the Asia-Pacific area.” By 2030, India’s GDP will be larger than Germany, France, and the United Kingdom, the three major Western European economies.
“Overall, India is anticipated to remain one of the fastest-growing economies in the world over the next decade,” it stated. A number of significant growth drivers boost the Indian economy’s long-term prospects.
“An significant positive element for India is its big and rapidly increasing middle class, which is helping to increase consumer spending,” according to IHS Markit, which predicts that the country’s consumption expenditure would double from $1.5 trillion in 2020 to $3 trillion in 2030.
India’s real GDP growth rate is expected to be 8.2% for the whole fiscal year 2021-22 (April 2021 to March 2022), rebounding from a severe drop of 7.3 percent year-on-year in 2020-21, according to IHS Markit.
The Indian economy is expected to develop at a healthy pace of 6.7 percent in the fiscal year 2022-23. India has become an increasingly important investment destination for a wide range of multinationals in numerous areas, including manufacturing, infrastructure, and services, due to its quickly developing domestic consumer market and massive industrial sector.
India’s present digital transformation is predicted to boost the expansion of e-commerce, transforming the retail consumer market landscape over the next decade.
Is GDP calculated per capita?
The Gross Domestic Product (GDP) per capita is calculated by dividing a country’s GDP by its total population. The table below ranks countries throughout the world by GDP per capita in Purchasing Power Parity (PPP), as well as nominal GDP per capita. Rather to relying solely on exchange rates, PPP considers the relative cost of living, offering a more realistic depiction of real income disparities.
Is India considered developed?
India is a southern Asian emerging and developing country (EDC). It is the world’s largest democracy as well as one of the fastest growing economies.