As India pips UK, a reality check from Uday Kotak | The Financial Express

As India pips UK, a reality check from Uday Kotak

While the Indian economy is ahead of the UK in absolute number, India’s per capita income is significantly lower on account of a larger population, he said.

As India pips UK, a reality check from Uday Kotak
On an adjusted basis and using the dollar exchange rate on the last day of the quarter, the size of the Indian economy in nominal terms was $854.7 billion compared to $816 billion of the UK, the report said.

India has a long way to go when it comes to improving per capita income even it has overtaken the United Kingdom as the fifth-largest economy in the world, veteran banker and chief executive officer of Kotak Mahindra Bank Uday Kotak said.

While the Indian economy is ahead of the UK in absolute number, India’s per capita income is significantly lower on account of a larger population, he said.

“Proud moment for India to pip UK, our colonial ruler, as the 5th largest economy: India $3.5 trillion vs UK $3.2 trillion. But a reality check of population denominator: India: 1.4 billion vs UK 0.068 billion. Hence, per capita GDP we at $2,500 vs $47,000. We have miles to go … Let’s be at it!” Kotak said on Twitter.

Also Read: India’s trade worries grow as exports lose steam, imports surge

In US dollars terms, India replaced the UK as the fifth-largest economy in the three months ended March 31, according to GDP figures from the International Monetary Fund, Bloomberg reported. On an adjusted basis and using the dollar exchange rate on the last day of the quarter, the size of the Indian economy in nominal terms was $854.7 billion compared to $816 billion of the UK, the report said.

This is not the first occasion when the Indian economy had overtaken the UK, as per a research report by the State Bank of India, which said this had occurred as early as December 2021. The share of India’s GDP in the global economy is now 3.5% as against 2.6% in 2014 and is likely to cross 4% in 2027, the current share of Germany in the global GDP, the report said.

India’s GDP growth in Q1FY23 was 13.5% and the estimates for FY23 currently range from 6.7-7.7%. However, these estimates also place GDP growth at higher-than-the-world average, according to SBI, which pegs 6-6.5% GDP growth as the new normal. India is on a trajectory to surpass Germany in 2027 and Japan by 2029 at the current rate of growth, the report said.

Citing the example of smartphone maker Apple’s recent decision to shift part production to India, the report said India is likely to be the beneficiary as China slows down in terms of new investment intentions. However, economists at SBI have also sought for revision the Index of Industrial Production basket to replace newer products and shifts in production.

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.