India's Economy Surpasses That Of Great Britain

[Malcolm Merlyn]

Quote

As Theresa May returned home from her unsuccessful visit to India, she would bear witness to another relegation for the UK: India’s economy will be larger than the UK’s, for the first time in more than 100 years. This dramatic shift has been driven by India’s rapid economic growth over the past 25 years as well as Britain's recent woes, particularly with the Brexit. Once expected to overtake the UK GDP in 2020, the surpasso has been accelerated by the nearly 20% decline in the value of the pound over the last 12 months, consequently UK’s 2016 GDP of GBP 1.87 trillion converts to $2.29 trillion at exchange rate of ~GBP 0.81 per $1, whereas India’s GDP of INR 153 trillion converts to $2.30 trillion at exchange rate of ~INR 66.6 per $1. Furthermore, this gap is expected to widen as India grows at 6 to 8% p.a. compared to UK’s growth of 1 to 2% p.a. until 2020, and likely beyond. Even if the currencies fluctuate that modify these figures to rough equality, the verdict is clear that India’s economy has surpassed that of the UK based on future growth prospects.

This marks a significant landmark in India’s economic history, whose story over the last 150 years can be split into three parts: a period of divergence, of relative stagnation and a period of convergence with respect to the economy of the UK. Divergence begins with the UK’s industrial revolution in the 18th century to India’s independence in 1947 when the UK’s growth significantly outpaced India’s. The period of stagnation extended from 1947 to 1991 where both India and the UK grew at roughly the same rate. This was despite India being independent, and was predominantly due to India’s misinformed choice of pursuing a closed, centrally planned, socialist economy. Convergence began in 1991, when India finally implemented market reforms, and continues to this day. During this period India has experienced much faster economic growth than the UK and has finally in 2016 overtaken it in absolute terms, although is still less than one-fifth that of the UK in per capita terms.

History teaches us that milestones are important, that they can help clarify and bring to light underlying long-term trends, as well as encourage people to shed their biases. Japan’s victory over Russia in 1905 is an illustrative example: The event helped break the conception of the inability of the East to militarily defeat a western power and also highlighted the economic rise of Japan that had gradually taken place over the second half of the 19th century. India’s overtaking of the UK’s GDP in 2016 could serve as a similar moment.

This surpasso has three important implications. First, it highlights India’s arrival on the global stage and a significant change in power dynamics between India and the west. The effects of this are already being witnessed in India’s repudiation of a trade deal with the UK, where it stood firm in its ask for more favorable immigration for Indian nationals. Another example is the failure of May to secure a meeting with the Tata Group, who has 4,000 British employees at a steel plant in Port Talbot, that could potentially be shut down. Second it should give India the ability to shed any residual notion of colonial inferiority and enable it to have a more open mindset and look at alternative nations to emulate. For example, India could increasingly look at China, a country of similar population and closer to India’s own cultural tradition, as a model for its own economic growth. Lastly, it should redouble India’s efforts towards furthering market reform given that India’s per capita GDP is still less than one-fifth that of the UK, highlighting the tremendous scope for further convergence.

1947 gave India agency to chart its own path; 1991 broke India out of its mold; and hopefully 2016 shall give India conviction and help it redouble its efforts towards convergence after celebrating a historic and emotional milestone of economically overtaking its former colonizer.

http://www.forbes.com/sites/realspin/2016/12/16/indias-economy-surpasses-that-of-great-britain/#32970d9b39eb

[zen]

Gdp per capita would be a lot better for uk .... quality > quantity 

 

To illustrate 

 

Country A -> 10 ppl produce 10 items, total items 100

 

Country B -> 101 ppl produce 1 item each, total items 101

 

Production of B > A, but B is not necessarily better off

 

Though PPP data per capita should be interesting to see

 

[Malcolm Merlyn]

Just now, zen said:

Gdp per capita would be a lot better for uk .... quality > quantity 

 

To illustrate 

 

Country A -> 10 ppl produce 10 items, total items 100

 

Country B -> 101 ppl produce 1 item each, total items 101

 

Production of B > A, but B is not necessarily better off

 

Though PPP data per capita should be interesting to see

 

 

If we want to talk per capita then GDP in PPP terms is a better indicator.

[zen]

Though Ind is growing at 6-8% in GDP, there is a cost associated with it as well in terms of damage to environment / natural resources / etc est at $80B annually in 2009 money (roughly equalivalent to 6% of 2009 GDP) .... this damage could be too expensive to repair

[zen]

Based on GDP per capita PPP, Ind is at 126 .... All BRIC(S) countries are ranked higher .... In sub con, SL and Bhutan are ranked higher

 

Country/Economy	GDP per capita PPP (Int. $)
	2016	times to world	Rank
Qatar	129,727	7.94	1
Luxembourg	101,936	6.24	2
Macao SAR	96,148	5.89	3
Singapore	87,082	5.33	4
Brunei Darussalam	79,711	4.88	5
Kuwait	71,264	4.36	6
Ireland	69,375	4.25	7
Norway	69,296	4.24	8
United Arab Emirates	67,696	4.15	9
San Marino	64,444	3.95	10
Switzerland	59,376	3.64	11
Hong Kong SAR	58,095	3.56	12
United States	57,294	3.51	13
Saudi Arabia	54,078	3.31	14
Netherlands	50,846	3.11	15
Bahrain	50,303	3.08	16
Sweden	49,678	3.04	17
Australia	48,806	2.99	18
Germany	48,190	2.95	19
Iceland	48,070	2.94	20
Austria	47,856	2.93	21
Taiwan Province of China	47,790	2.93	22
Denmark	46,603	2.85	23
Canada	46,240	2.83	24
Belgium	44,881	2.75	25
Oman	43,737	2.68	26
United Kingdom	42,514	2.6	27
France	42,384	2.6	28
Finland	41,813	2.56	29
Japan	38,894	2.38	30
Equatorial Guinea	38,699	2.37	31
Korea	37,948	2.32	32
Malta	37,891	2.32	33
Puerto Rico	37,723	2.31	34
New Zealand	37,108	2.27	35
Spain	36,451	2.23	36
Italy	36,313	2.22	37
Israel	34,834	2.13	38
Cyprus	34,387	2.11	39
Czech Republic	33,223	2.03	40
Slovenia	32,028	1.96	41
Trinidad and Tobago	31,934	1.96	42
Slovak Republic	31,182	1.91	43
Lithuania	29,882	1.83	44
Estonia	29,502	1.81	45
Portugal	28,515	1.75	46
Seychelles	28,148	1.72	47
Poland	27,715	1.7	48
Malaysia	27,234	1.67	49
Hungary	27,211	1.67	50
Greece	26,809	1.64	51
Russia	26,109	1.6	52
Latvia	25,740	1.58	53
Kazakhstan	25,669	1.57	54
St. Kitts and Nevis	25,372	1.55	55
The Bahamas	24,618	1.51	56
Antigua and Barbuda	24,050	1.47	57
Chile	23,969	1.47	58
Panama	22,788	1.4	59
Croatia	22,415	1.37	60
Romania	22,319	1.37	61
Uruguay	21,570	1.32	62
Turkey	21,147	1.3	63
Mauritius	20,525	1.26	64
Argentina	20,171	1.24	65
Bulgaria	20,116	1.23	66
Gabon	19,252	1.18	67
Mexico	18,865	1.16	68
Lebanon	18,524	1.13	69
Islamic Republic of Iran	18,136	1.11	70
Azerbaijan	17,688	1.08	71
Belarus	17,497	1.07	72
Turkmenistan	17,347	1.06	73
Barbados	17,137	1.05	74
Montenegro	17,035	1.04	75
Botswana	16,948	1.04	76
Thailand	16,835	1.03	77
Iraq	16,544	1.01	78
Costa Rica	16,142	0.989	79
Dominican Republic	15,946	0.977	80
China	15,424	0.945	81
Maldives	15,288	0.936	82
Palau	15,260	0.935	83
Brazil	15,211	0.932	84
Suriname	15,180	0.93	85
Venezuela	15,103	0.925	86
Algeria	14,950	0.916	87
FYR Macedonia	14,530	0.89	88
Libya	14,236	0.872	89
Serbia	14,226	0.871	90
Colombia	14,162	0.867	91
Grenada	14,102	0.864	92
South Africa	13,179	0.807	93
Peru	13,019	0.797	94
Mongolia	12,161	0.745	95
Egypt	12,137	0.743	96
St. Lucia	11,970	0.733	97
Albania	11,861	0.726	98
Namibia	11,756	0.72	99
Indonesia	11,699	0.716	100
Tunisia	11,657	0.714	101
Dominica	11,484	0.703	102
St. Vincent and the Grenadines	11,267	0.69	103
Sri Lanka	11,189	0.685	104
Jordan	11,125	0.681	105
Ecuador	11,037	0.676	106
Bosnia and Herzegovina	11,034	0.676	107
Georgia	10,100	0.619	108
Swaziland	9,768	0.598	109
Paraguay	9,354	0.573	110
Fiji	9,353	0.573	111
Jamaica	8,974	0.55	112
El Salvador	8,914	0.546	113
Armenia	8,881	0.544	114
Morocco	8,360	0.512	115
Ukraine	8,230	0.504	116
Belize	8,186	0.501	117
Bhutan	8,129	0.498	118
Guatemala	7,937	0.486	119
Guyana	7,920	0.485	120
Philippines	7,696	0.471	121
Bolivia	7,191	0.44	122
Angola	6,844	0.419	123
Republic of Congo	6,787	0.416	124
Cabo Verde	6,744	0.413	125
India	6,658	0.408	126

Edited March 30, 2017 by zen

[Mariyam]

Obviously per capita numbers wouldn't be flattering given India's population base.

But in terms of size of the economy India accounted for nearly a fifth of the worlds population and GDP in the 1700s. Or so I've read on ICF. The Brits reduced us to utter destitution. Now we are headed back,albeit slowly, to contributing a larger share of the worlds output.

 

 

 

 

[Muloghonto]

6 hours ago, Malcolm Merlyn said:

 

If we want to talk per capita then GDP in PPP terms is a better indicator.

actually GINI coefficient is an ever better indicator. GDP per capita's biggest problem is wealth distribution. Like for e.g., in Russia, approximately 1000 people are worth 70% of Russia's GDP. Without wealth distribution factors, we don't know how well the country is doing, because it could be a case of '2 Bill Gates and 1000 beggars' scenario as well.

 

[G_B_]

considering the strength of the rupee right now I am guessing India is officially number 5 in the world in terms of nominal GDP

[kubrickian]

India has shown good growth and decent improvement in social indicators in last 25 years. With the size of population and the magnitude of problems India has, its commendable to see its achievements, at lease those of the recent past. What's required now is to improve per capita income and further improve quality of living.

 

Crucial factor will be to create millions of jobs(by building infrastructure, reducing corruption, reduce red tape for starting up companies, a culture of entrepreneurship should be cultivated to build companies which can create employment) and to make sure we have a population which is capable of doing those jobs(improving health care.  Physical and mental fitness will improve a person's capacity to do a job) and improve literacy levels and quality of education.

 

Also important is to improve social conditions such as better treatment of women and better opportunities for women, better treatment of minorities, dalits and other backward communities, improving law and order situation, building better quality cities and towns, improving basic facilities in all villages and having better control over air and water pollution etc.

 

Some regions in India are still lagging and there is a huge disparity and these should be brought on par with other regions. These are big challenges but should be considered big opportunities. I feel next 25 years will be a very crucial phase for India in its development. 

 

 

Edited March 31, 2017 by kubrickian

[RookieFan]

Well, this is NO BIG Deal. According to Economic Historians, until 1850's China and India had 50% of world's GDP. The British were smart to usurp most of that and channel it to British "Empire".

 

 

[kubrickian]

6 hours ago, RookieFan said:

Well, this is NO BIG Deal. According to Economic Historians, until 1850's China and India had 50% of world's GDP. The British were smart to usurp most of that and channel it to British "Empire".

 

 

That's partly true. Here's my take on this matter.

 

1. After 19th century, Britain became lot more productive and richer because of Industrial Revolution and produced more wealth which was possible in part because of colonizing other countries and using their raw materials and using them as markets. 

2. They halted India from becoming a modern economy for 200 years because it was in their best interests to keep using India and other colonies to their advantage. They pretended to "modernize" India by making some cosmetic changes like improving infrastructure, cities but they were doing it because it helped their interests. For instance, rail line and ports helped transport raw materials across India back to their country.

 

But you have to give credit where its due. Britain and other Western countries did much better in advancement of science and technology. Ancient China, Persia, India were doing well till a certain point in terms of inventions and discoveries but Western countries surpassed them. In India's case, a lot of the universities and centers of learning were destroyed by invading armies and the work done by scientists was halted from developing further. As a result, Western societies produced the technology first required for Industrial revolution, treatment of diseases and improving health care, traveling across oceans and developing guns and other advanced weapons to colonize other countries.

 

Whereas India, China continued to remain largely agrarian economies with an increasing population(because farming communities tend to have larger families) and therefore standard of living remained stagnant. Before 19th century, per capita of Europe was lesser than India and China. After the Industrial revolution, they became richer by multiple folds. 

 

The lesson that needs to be learned is to invest more in science and technology and have centers of learning which can produce great scientists and engineers because it has the capability of transforming our society.

 

Even today, some of our best minds are leaving India to other Western countries and improving their societies. Also our standard of education in most of our schools and colleges leaves a lot to be desired because they still emphasize rote learning over improving knowledge. Most young people even today lack the drive to read books to improve their world view and expand their minds, preferring to watch Bollywood crap and IPL and spend most of their time on social media. 

 

Lack of emphasis on development of science and technology and lack of knowledge on different subjects(ignorance) = lack of progress in society.

[lucindabv3]

SUBJ1

[Vilander]

Must see infographics on Indian economy. This will help you understand where we belong and where we are headed.

 

It will always just be India v China.

 

https://infogr.am/Share-of-world-GDP-throughout-history

 

 

 

[Vilander]

 

 

[Silva]

Gdp doesnt take into account the black economy, out of every registered business in india their are about 127 unregistered ones. If india figured out a way to register that black market activitiy or figure out a way to report it the gdp would go up a lot. 

 

Modi has taken the black economy on and has implemented reforms to make it easier to register businesses but it hasnt been enough to even put a dent in it. Although some of the reforms havnt been fully implemented yet.

[Vilander]

On 3/30/2017 at 0:13 PM, zen said:

Based on GDP per capita PPP, Ind is at 126 .... All BRIC(S) countries are ranked higher .... In sub con, SL and Bhutan are ranked higher

 

Country/Economy	GDP per capita PPP (Int. $)
	2016	times to world	Rank
Qatar	129,727	7.94	1
Luxembourg	101,936	6.24	2
Macao SAR	96,148	5.89	3
Singapore	87,082	5.33	4
Brunei Darussalam	79,711	4.88	5
Kuwait	71,264	4.36	6
Ireland	69,375	4.25	7
Norway	69,296	4.24	8
United Arab Emirates	67,696	4.15	9
San Marino	64,444	3.95	10
Switzerland	59,376	3.64	11
Hong Kong SAR	58,095	3.56	12
United States	57,294	3.51	13
Saudi Arabia	54,078	3.31	14
Netherlands	50,846	3.11	15
Bahrain	50,303	3.08	16
Sweden	49,678	3.04	17
Australia	48,806	2.99	18
Germany	48,190	2.95	19
Iceland	48,070	2.94	20
Austria	47,856	2.93	21
Taiwan Province of China	47,790	2.93	22
Denmark	46,603	2.85	23
Canada	46,240	2.83	24
Belgium	44,881	2.75	25
Oman	43,737	2.68	26
United Kingdom	42,514	2.6	27
France	42,384	2.6	28
Finland	41,813	2.56	29
Japan	38,894	2.38	30
Equatorial Guinea	38,699	2.37	31
Korea	37,948	2.32	32
Malta	37,891	2.32	33
Puerto Rico	37,723	2.31	34
New Zealand	37,108	2.27	35
Spain	36,451	2.23	36
Italy	36,313	2.22	37
Israel	34,834	2.13	38
Cyprus	34,387	2.11	39
Czech Republic	33,223	2.03	40
Slovenia	32,028	1.96	41
Trinidad and Tobago	31,934	1.96	42
Slovak Republic	31,182	1.91	43
Lithuania	29,882	1.83	44
Estonia	29,502	1.81	45
Portugal	28,515	1.75	46
Seychelles	28,148	1.72	47
Poland	27,715	1.7	48
Malaysia	27,234	1.67	49
Hungary	27,211	1.67	50
Greece	26,809	1.64	51
Russia	26,109	1.6	52
Latvia	25,740	1.58	53
Kazakhstan	25,669	1.57	54
St. Kitts and Nevis	25,372	1.55	55
The Bahamas	24,618	1.51	56
Antigua and Barbuda	24,050	1.47	57
Chile	23,969	1.47	58
Panama	22,788	1.4	59
Croatia	22,415	1.37	60
Romania	22,319	1.37	61
Uruguay	21,570	1.32	62
Turkey	21,147	1.3	63
Mauritius	20,525	1.26	64
Argentina	20,171	1.24	65
Bulgaria	20,116	1.23	66
Gabon	19,252	1.18	67
Mexico	18,865	1.16	68
Lebanon	18,524	1.13	69
Islamic Republic of Iran	18,136	1.11	70
Azerbaijan	17,688	1.08	71
Belarus	17,497	1.07	72
Turkmenistan	17,347	1.06	73
Barbados	17,137	1.05	74
Montenegro	17,035	1.04	75
Botswana	16,948	1.04	76
Thailand	16,835	1.03	77
Iraq	16,544	1.01	78
Costa Rica	16,142	0.989	79
Dominican Republic	15,946	0.977	80
China	15,424	0.945	81
Maldives	15,288	0.936	82
Palau	15,260	0.935	83
Brazil	15,211	0.932	84
Suriname	15,180	0.93	85
Venezuela	15,103	0.925	86
Algeria	14,950	0.916	87
FYR Macedonia	14,530	0.89	88
Libya	14,236	0.872	89
Serbia	14,226	0.871	90
Colombia	14,162	0.867	91
Grenada	14,102	0.864	92
South Africa	13,179	0.807	93
Peru	13,019	0.797	94
Mongolia	12,161	0.745	95
Egypt	12,137	0.743	96
St. Lucia	11,970	0.733	97
Albania	11,861	0.726	98
Namibia	11,756	0.72	99
Indonesia	11,699	0.716	100
Tunisia	11,657	0.714	101
Dominica	11,484	0.703	102
St. Vincent and the Grenadines	11,267	0.69	103
Sri Lanka	11,189	0.685	104
Jordan	11,125	0.681	105
Ecuador	11,037	0.676	106
Bosnia and Herzegovina	11,034	0.676	107
Georgia	10,100	0.619	108
Swaziland	9,768	0.598	109
Paraguay	9,354	0.573	110
Fiji	9,353	0.573	111
Jamaica	8,974	0.55	112
El Salvador	8,914	0.546	113
Armenia	8,881	0.544	114
Morocco	8,360	0.512	115
Ukraine	8,230	0.504	116
Belize	8,186	0.501	117
Bhutan	8,129	0.498	118
Guatemala	7,937	0.486	119
Guyana	7,920	0.485	120
Philippines	7,696	0.471	121
Bolivia	7,191	0.44	122
Angola	6,844	0.419	123
Republic of Congo	6,787	0.416	124
Cabo Verde	6,744	0.413	125
India	6,658	0.408	126

yup congo is better than India in terms of economy and San marinio is better than US. top class post.

[zen]

9 minutes ago, Vilander said:

yup congo is better than India in terms of economy and San marinio is better than US. top class post.

A short lesson on GDP per capita based on PPP ->  https://en.wikipedia.org/wiki/Purchasing_power_parity

[zen]

3 hours ago, Vilander said:

Must see infographics on Indian economy. This will help you understand where we belong and where we are headed.

 

It will always just be India v China.

 

https://infogr.am/Share-of-world-GDP-throughout-history

 

 

 

 

3 hours ago, Vilander said:

 

 

 

So based on the above where is Ind headed? FYI, the graphs that you presented show a downward trend in terms of Ind's GDP as the percent of the world's (as represented by countries in the graph), while Ind's population has risen considerably relatively

 

 

 

 

Edited June 1, 2017 by zen

[jusarrived]

On 2017-3-30 at 5:08 PM, zen said:

Gdp per capita would be a lot better for uk .... quality > quantity 

 

To illustrate 

 

Country A -> 10 ppl produce 10 items, total items 100

 

Country B -> 101 ppl produce 1 item each, total items 101

 

Production of B > A, but B is not necessarily better off

 

Though PPP data per capita should be interesting to see

 

I think every one understands percapita income is not comparable between these countries.

Even then your example is way off .

 

Country A produces 10 and consumes 8 items / person in comparison Country B may be produces 1 and consumes as much . So the quality better in UK is defiantly not 10 times .

[zen]

41 minutes ago, jusarrived said:

I think every one understands percapita income is not comparable between these countries.

Even then your example is way off .

 

Country A produces 10 and consumes 8 items / person in comparison Country B may be produces 1 and consumes as much . So the quality better in UK is defiantly not 10 times .

The e.g. is a random one highlighting the importance of GDP per capita 

 

i.e. say at $1 per item, A's GDP is $100 with GDP per capita of $10, while B's GDP is $101 with GDP per capita of $1. Based on the above should B be celebrating that its GDP is better than A's, when its GDP per capita is much lower

 

The discussion led to GDP per capita PPP where UK is at $42k, while Ind is at $6.7k

 

 

 

 

Edited June 1, 2017 by zen