India has finally overtaken its erstwhile colonial master, the United Kingdom, in terms of the size of the economy — the first time after nearly 150 years. According to the International Monetary Fund (IMF), India is now the fifth largest economy, relegating the UK to the sixth spot in the global economic pecking order.
The Indian economy is now worth $3.5 trillion compared to Britain’s $3.2 trillion. It is now just behind the United States, China, Japan and Germany. The announcement, coming in the 75th year anniversary of Indian Independence, will offer an occasion to rejoice.
This proud moment, however, has come five years late as the country had almost poised to beat Britain in 2016. In October 2016, India’s GDP was $2.29 trillion compared to $2.34 trillion of the Brexit-mauled UK economy — a difference of just $50 billion — which was expected to be erased by 2017. But the demonetisation programme announced in November 2016 slowed India’s victory lap.
Having finally beaten the former colonial master, India must not become complacent about the economy as the fruits of economic growth will manifest only when the average income — as measured on per capita basis — of a citizen grows. India’s per capita income is $2,500 compared to Britain’s $47,000.
While the tag of the fifth largest economy is incredible, the country and its governments should not lose sight of the fact that a large number of people are still dependent on agriculture and manufacturing does not contribute anywhere close to what it does in the United States, China, Japan or Germany. As India’s strategic rival China’s economy stands at $19 trillion, India should aim at crossing the $10 trillion mark, if we wish to have any heft in the global community. Let’s hope this government takes steps to facilitate that.