Post the World Economic Outlook Report by the International Monetary Fund (IMF), there has been an absurd comparison between India and Bangladesh. This comparison is highlighting that the per capita GDP of Bangladesh will overtake India’s per capita GDP this year. However, in this politically hot discussion many important and vital issues mentioned in the same report, remain in background which have far higher impact on the economic future of India.
The per capita GDP of India is expected to remain at US$1,877 against Bangladesh’s US$1,888. Due to unprecedented and most stringent pandemic induced lockdown in the world, Indian economy has witnessed an unprecedented economic contraction which is the worst since 1990-91. As per the report Indian economy is expected to contract by 10.3 percent in 2020. As a result of this contraction, India’s per capita GDP is expected to decline by 10.5 percent. During the same period per capita GDP of Bangladesh is expected grow by 4 percent. However by the next year India will overtake Bangladesh with a V-shaped economic recovery. The economic growth in India is expected be higher than Bangladesh and other Asian counterparts in 2021. The accelerated growth in GDP will result into 8.2 percent growth in India’s per capita GDP to US$ 2,030 while Bangladesh would witness an expected growth of 5.4 per cent to USD 1,990. This will continue in future too.
The other part of whole story about Bangladesh is quite a learning experience for any developing country. In 2015, Bangladesh’s per capita GDP was only 76% India’s per capita GDP. In just six years, Bangladesh has been able to bridge the gap. Since 2010, Bangladesh has posted an average annual growth rate of 9.5 percent in its per capita GDP riding on export boom and sustained growth in economic activities. Bangladesh has able to improve on many other indicators such as HDI, education and employment opportunities. These must be the economic lesson than one-time event per capita GDP.
Rajeev Upadhyay
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