Recently India crossed United Kingdom to become 5th largest economy, few years ago India was at 11th position in the rankings. A recent report by SBI indicated that India will surpass Japan and Germany in the coming decade in the rankings. The SBI's Economic Research Department predicted that India would surpass Germany in 2027 and most likely Japan by 2029 at the current rate of growth and become the world's 3rd largest economy.
This is a remarkable achievement by any standards, said the report, authored by Soumya Kanti Ghosh, Group Chief Economic Adviser, SBI.
For Q1 FY 2022-23, India registered GDP growth at 13.5%. The report said, at this rate India is likely to be the fastest growing economy in the current fiscal.
“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 $854.7 billion. On the same basis, UK was $816 billion,” Bloomberg News said in a report, adding that the calculations were done using the IMF database and historic exchange rates on its terminal.
India's GDP expanded 13.5% in the April-June quarter, the quickest pace in a year, to retain the world's fastest growing economy tag but rising interest costs and the looming threat of a recession in major world economies could slow the momentum in the coming quarters.
With record beating expansion in the April-June quarter, the Indian economy has now overtaken the U.K., which has slipped to the sixth spot - Reported The Hindu
"Proud moment for India to pip the U.K., our colonial ruler, as the 5th largest economy: India $3.5 trillion vs UK $3.2 trillion. But a reality check of population denominator: India: 1.4 billion vs UK 0.068 billion. Hence, per capita GDP we at $2,500 vs $47,000. We have miles to go... Let's be at it!," Uday Kotak, CEO of Kotak Mahindra Bank, said in a tweet.
The report predicted that India will soon be the beneficiary as China slows down in terms of new investment intentions. "Global tech major Apple's recent decision to shift part production of its flagship iPhone 14 model for worldwide shipping from India bears testimony to such optimism! The move by Apple, the most recognizable face of tech-infused innovation in the last two centuries, that captures aspirations of an upwardly mobile population should open the floodgates for other major conglomerates to follow suit,"
Image Source- Times of India
The report noted that, If India continues to adopt right policy perspective than it will attract what China did few years back making it the largest economy in the past. It is to be noted that this is in the middle of COVID and Russia- Ukraine war.
Also, one more thing to note is that India is lauded for doing relatively better than other countries but this does not solves the problems of India as such. There is still lot of unemployment and poverty in India.
A lot needs to be done on the social front and in terms of better education and healthcare systems. We can look at the numbers and be happy but this only tells the half picture as we are still quite far on other fronts.
What lies ahead?
An uneven monsoon is likely to weigh upon agriculture growth and rural demand.
The GDP print will, however, allow the RBI to focus on controlling inflation, which has stayed above the comfort zone of 6% for seven straight months.
The slowing growth of the manufacturing sector at 4.8% is an area of worry.
Higher energy and commodity prices that are likely to weigh on consumer demand and companies' investment plans
Consumer spending, which accounts for nearly 55% of economic activity, has been hit hard by soaring food and fuel prices.
Overall, its a good news but a lot more to be done. Small and middle class needs the support from the government as big businesses can earn profits through rising prices somehow and that number can show increased GDP numbers in real terms but that doesn't means that daily life essentials are at affordable prices in India for common man, as Inflation is quite high still.
stay tuned for more..
I agree with the point that says, a lot needs to be done as we have a lot of poverty and overpopulation in India.