India-world’s fifth-largest economy

Context: According to the latest calculations by Bloomberg, India has become the world’s fifth-largest economy after it overtook the United Kingdom in end-March 2022.

Comparison between India and UK

• On an adjusted basis and using the dollar exchange rate on the last day of the relevant quarter, the size of the Indian economy in nominal cash terms in the quarter through March was $854.7 billion.
• On the same basis, UK was $816 billion.

GDP per capita

• GDP per capita provides a more realistic comparison of income levels because it divides a country’s GDP by the population of that country.
• The income of an average Indian is far lower.

Poverty levels

• Low per capita incomes often point to high levels of poverty.
• At the start of the 19th century, the UK’s share in extreme poverty was considerably higher than India’s.
• However, the relative positions have reversed even though India has made giant strides in curbing poverty.

Human Development Index

• The end goal of higher GDP and faster economic growth is to have better human development parameters.
• The Human Development Index is a composite of health, education and standard of living parameters.
• Despite its secular improvement, India might still take a decade to be where the UK was in 1980.

Universal Healthcare Coverage

• A crucial element of becoming richer as a country is the quality of life available to citizens.
• The Universal Health Coverage (UHC) Index is measured on a scale from 0 (worst) to 100 (best) based on the average coverage of essential services including reproductive, maternal, new born and child health, infectious diseases, non-communicable diseases and service capacity and access.
• While faster economic growth and the government’s policy focus on healthcare schemes since 2005 have made a distinct improvement for India, there is still a long way to go.

Source: Indian Express

Previous Year Question

Q.1) Consider the following statements

1. Purchasing Power Parity (PPP) exchange rates are calculated by comparing the prices of the same basket of goods and services in different countries.
2. In terms of PPP dollars, India is the sixth-largest economy in the world.

Which of the statements given above is/are correct? (2019)

1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2