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  1. ​India now a ‘lower-middle-income’ economy for World Bank

​India now a ‘lower-middle-income’ economy for World Bank

The World Bank has dropped the use of developing nation tag for India in its specialised reports and instead classifies it as a "lower-middle-income" economy in South Asia, a top official has said.

By: | New Delhi | Updated: June 4, 2016 7:50 AM
World Bank, Jim Yong Kim, global economy, tax evasion, Panama Papers Accordingly, while India will be referred to as a lower-middle-income economy in all of World Bank’s analytical reports, it may be referred to as a developing country only in some of the generic communications. (Reuters)

The World Bank has dropped the use of developing nation tag for India in its specialised reports and instead classifies it as a “lower-middle-income” economy in South Asia, a top official has said.

“In our World Development Indicators publication, we’ve stopped grouping low- and middle-income countries together as ‘developing countries’. For analytical purposes, India continues to be classified as lower-middle-income economy,” World Bank Data Scientist Tariq Khokhar told IANS.

“We are not changing term ‘developing countries’ or ‘developing world’ in our general work but when it comes to presenting specialized data, we will use more precise groupings of countries,” Khokhar said in an e-mail interview, adding, the term developing country was no more useful for analytical purposes.

Accordingly, while India will be referred to as a lower-middle-income economy in all of World Bank’s analytical reports, it may be referred to as a developing country only in some of the generic communications.

The decision to stop using the term developing countries, the World Bank specialist said, has been taken in view of the word having no universal definition, causing countries like Malaysia and Malawi to be come under the same category earlier.

“There is no internationally agreed definition of the term ‘developing world’. There’s often a big gap between the countries within the developing world grouping — which make, for instance, Malaysia and Malawi both developing countries,” Khokhar said.

Malaysia has a gross domestic product of $338.1 billion, according to the 2014 figures, while Malawi’s stands at a merely $4.258 billion. Now while Malaysia is referred to as upper middle-income economy, Malawi falls in a low-income classification.

As per the classification, Afghanistan, Bangladesh and Nepal are low-income economies, Pakistan and Sri Lanka fall under lower-middle-income, Brazil, South Africa and China under upper middle income, Russia and Singapore under high-income-Non-OECD and the US under high income-OECD.

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  1. A
    Ashish
    Jun 3, 2016 at 4:46 pm
    If a country with GDP of $338 billion (Malaysia) per 29.53 million people can be considered upper middle group, then why India having GDP $2 trillion per 1.252 billion people is considered lower middle group country..
    Reply
    1. A
      Ashish
      Jun 3, 2016 at 5:01 pm
      India's growing potion is really a concern for its development..
      Reply
      1. A
        Ashish
        Jun 3, 2016 at 5:03 pm
        India's growing potion is really a concern..
        Reply
        1. S
          Siddhartha Bonnerjee
          Jun 3, 2016 at 5:21 pm
          This is nothing but nuisance politics, The way country like India going on, is really a matter of worrying. But it's happening because of Refugee n illegal infiltration of huge people from Countries like Bangladesh, stan, Nepal n Bhutan. Otherwise India will be in Elite Cl.
          Reply
          1. Sayed F S Rizwi
            Jun 5, 2016 at 5:43 am
            Per capital income is low then Malaysia
            Reply
            1. N
              Nilesh
              Jun 4, 2016 at 4:47 am
              If you do the maths here its coming upto $11,446 per capita for Malaysia and $1600(Roughly ₹1Lakh per capita per year) for India. Based on the criteria which supposedly UN has formulated "Lower middle income countries had GNI per capita between US$1,026 and US$4,036" Reference :s:en.wikipedia/wiki/Developing_country
              Reply
              1. T
                The_Observer
                Jun 4, 2016 at 11:35 am
                The World Bank defines GNI per capita of USD 1025 and below as low income. Lower middle income as defined by the World Bank is USD 1046 to USD 4125. Upper middle income is USD 4126 - USD 12,735. Above that is upper income countries.India's GNI per capita for 2014 was USD 1570 and is definitely lower middle income.China's GNI per capita for 2014 was USD 7400 per capita and would be what I consider middle-middle income.Fear for most emerging economies is the middle income trap. China was hoping to break through to being a wealthy country by 2025 but because of the recession perhaps pushed out to 2030. Even then the average GDP per capita of China will be 40% of the USA's which will still allow for further efficiency and growth.
                Reply
                1. s
                  sagar....
                  Jun 3, 2016 at 7:25 pm
                  India's economy is approximately 6 times larger than Malaysia but potion is almost 40 times so it lower the per capita income
                  Reply
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