India’s economy has reportedly overtaken the United Kingdom’s for the first time in over 150 years, now standing as the world’s sixth largest economy by GDP after the United States, china , Japan, Germany and France. Report Published in Forbes it was revealed that India’s Gross Domestic Product (GDP) surpass the United Kingdom the international Monitory Fund (IMF) had October 8, predicted the same and said that India will move ahead of Britain by the end of this Fiscal.
According to The Forbes report Indian economy was expected to overtake that of Uk only by 2020 but the surpasso has been accelerated by the nearly 20 percent decline in the value of the pound over the last 12 months. The Milestone is a symbol of India’s rapid economic growth and conversely the Uk’s post-Brexit slump.
Forbes report said, Recent vote in favor of leaving the European Union by UK Voters, popularly know as Brexit is expected to further dampen its economic growth. This may work India and the gap between both the economies may grow further. Uk 2016 GDP of GBP 1.87 trillion converts to $2.29 trillion at exchange rate of GBP 0.81 per $1, whereas India’s GDP of INR 153 trillion converts to $2.30 trillion at exchange rate of INR 66.6 per $1. Furthermore, this gap is expected to widen as India grows at 6 to 8% P.A compared to Uk growth of 1 to 2% P.A until 2020, and likely beyond.
Economically it’s been a banner year for India. In February it surpassed China as the World’s fastest growth economy. How ever there is a catch: India might have surpassed UK in terms of GDP but it still lags way behind when it comes to the per-capita income. this is because India’s population is much larger when compare to the Uk. MoS Kiren Rijiju also highlighted this fact while praising country’s growth. “India overtakes UK & becomes 5th largest GDP. India may have large population base but this is a big leap.
the report goes on to mention the reason behind this acceleration and gives credit to the 1991 economic reform brought by then government at the time when Dr Manmohan Singh served as Finance Minister of the country. Prior to 1991, the Indian economy was majorly closed to international competition and it was after the reforms that a free market economy was able to push the India on a path of growth.
Most recent currency reform an example in an effort to root out corruption and tax dodging, MOdi announced in November that high denomination currency rupee notes which comprise 86 percent of India currency in circulation would be taken out of circulation immediately. It was a drastic measure for a drastic problem in the world’s second most populous country; only 2 to 3 percent of Indians pay income tax become so many can hide their earnings with unaccounted for cash so called black money.