India has surpassed its colonial master, the United Kingdom, to become the world’s sixth-largest economy in GDP terms. The result is a symbol of India’s rapid economic growth.
Following the change in the rankings, India’s economy stands behind the United States, China, Japan, Germany and France.
This makes India the 6th richest nation in terms of nominal Gross Domestic Product or GDP, just behind France, though in terms of per capita income, the Asian giant remains low.
In terms of GDP calculated using a complicated purchasing power parity (PPP) formula which takes into account how much a dollar buys in a particular country, India is already the third richest nation after the US and China.
A 20 % decline in the value of the Great Britain pound over 2016 saw the former colonial power’s GDP slipping to $ 2.29 trillion, compared to India’s $ 2.30 trillion. This gap is however expected to widen as India grows at between 6 – 7 % per year compared to Britain’s 2-3 % annual growth.
India was supposed to surpass Britain’s economy by 2020. However the quicker overtake by the former colony happened partly because she grew faster and partly because of Britain’s own economic woes.
During the year 2016, India surpassed China as the world’s fastest-growing in February, while the International Monetary Fund in October had projected the country’s GDP will increase by 7.6 percent in 2017.
As per the report, the UK’s economy is expected to grow by 1.8 percent this year and slow down to 1.1 percent in 2017. Since it voted to leave the European Union in June, which could entail leaving the EU’s lucrative common market, Britain’s economy and currency have struggled.
A burst of reforms unshackled the economy in the 1990s, which saw growth leap to beyond 6 %. Through the last two-and-a-half decades the average GDP growth has been between 6-8 %, helping India turn into a two trillion dollar plus economy.
It underlines an emerging trend, which acknowledges India’s arrival on the global stage and marks a change in relations between a former colony and the rest of the world.
The impact of India’s liberalisation is now visible and the nation had been hailed as the software power-house of the world.
India’s economy maintained its growth around 7 percent primarily due to price slump in global commodities, good rainfall and lower-than-expected inflation, besides slew of reforms undertaken by the Modi government to spur growth.
However, analysts and economists are doubtfull whether India could hold on to its strong growth prospects in the medium term, especially, after the government announced demonetisation of high value currencies to flush out black money and fake currencies from the system.
