GDP of India Overtake UK in GDP terms

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GDP of India Means

GDP of India is now behind only the US, China, Japan, and Germany in economic scale, according to IMF projections.

Ten years ago, GDP of India was ranked 11th among the large economies while the UK was at the fifth position.

In another latest report, SBI said India will surpass Germany in 2027 and most likely Japan by 2029 and become the 3rd largest economy at the current growth rate.

But, with population of India at 1.4 billion against that of UK at 0.068 billion, per capita GDP of India is much lower for India.

Per capita GDP of India: $2,500
Per capita GDP of UK: $47,000.

GDP of India Growth Reasons

Current Reasons for Growth in GDP of India:

Pent-up demand is driving consumption as consumers, after two years of pandemic restrictions, are stepping out and spending.
The services sector has seen a strong bounce back that will get a boost from the festival season next month which increase the GDP of India 2022.

Legacy of Good Policy Decisions:

Government policies for boosting GDP of India 2022 since LPG reforms of easing FDA norms, rationalising tax structure by introduction of GST, improving Ease of Doing Business, FRBM act, FTAs

GDP of India: Reasons for UK’s Fall

Health spending was the biggest contributor to the fall, as the government scaled down coronavirus testing, contact tracing and vaccination programs and healthcare services took a hit.

Cost-of-living crisis has worsened and inflation has risen above the current 9.4% – highest in 40 years.

Three main sectors of the British economy – the service sector, industrial production and construction – shrank

GDP of India: Concerns

GDP of India growth has been majorly riding on the service sector. Manufacturing sector has not seen comparable growth.

GDP of India witnessed a slowing growth of the manufacturing sector at 4.8% in June quarter 2022, as against 59.2% in service sector for the same period.

Imports have been higher than exports in India.

India’s exports rose by 2.14% to $36.27 billion in July while the trade deficit almost tripled to $30 billion during the month which contribute an important role in GDP of India 2022.

Uneven monsoon due to rising climate change is likely to weigh upon agriculture growth and rural demand.

Cost Push inflation in recent times has led to higher energy and commodity prices that are likely to weigh on consumer demand and companies’ investment plans.