Indian economy scored one over its former colonial masters when it reportedly took over United Kingdom’s economy for the first time in 150 years. Earlier, a Forbes report published on December 16 had revealed that India’s Gross Domestic Product (GDP) was set to take over the UK by 2020. But to quote Forbes, the surpass had been majorly accelerated by a nearly 20% decline in pound’s value in the last year or so. Earlier this year, India had taken over China as the world’s fastest growing economy. The International Monetary Fund in October had stated that India was likely to maintain its position for quite a while, with the GDP expected to rise by 7.6% through 2017. Meanwhile, the Brexit is expected to further dampen UK’s economic growth. This can work in India’s favour, according to IE as the gap between both economies grow further. The United Kingdon’s GDP of GBP 1.87 trillion in 2016 converts to $2.29 at the exchange rate of £ 0.81 per $1. Meanwhile, India GDP of Rs 153 trillion translates to $2.30 trillion at an exchange rate of Rs 66.6 per $. Moreover, this gap between the two countries’ GDP is estimated to grow as India grows at 6 to 8% per annum as compared to United KIngdom’s growth of 1 to 2% per annum until 2020, according to Forbes.
Although things might look bright and sunny at this angle, it has to be understood that India still remains miles behind when it comes to per-capita income. Although one of the major reasons for this is India’s massive population. The Forbes report further states the primary reason behind this development, giving due credits to the 1991 economic reform, commonly known as the globalisation of Indian markets by the then government, when Dr Manmohan Singh was the Finance MInistyer of the country. It has to be noted that before 1991, the Indian economy was shut within the country.
SOURCE: The Financial Express