After the Indian GDP – in nominal cash terms according to exchange rate adjusted basis – overtook the UK GDP a few months back India’s prime minister Narendra Modi said,
Achieving this spot is special as we have left behind those who ruled over us for 250 years.
Another newspaper proclaimed,
The timing couldn’t have been more symbolic. Seventy-five years after it attained freedom at midnight, India now has an economy larger than that of its erstwhile colonial master. India has overtaken the UK to emerge as the fifth-largest economy in the world and is set to become the third largest by 2029, reports said on Saturday.
“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,” Bloomberg News said in a report, adding that the calculations were done using the IMF database and historic exchange rates on its terminal.
Is India’s prime minister right when he said India has left behind UK who ruled over the Indian subcontinent for roughly 250 years? Let us see.
First, I do not want to go into the difficulties of using total GDP as an indicator of economic performance and standard of living of people living under a nation state. Those who are interested to know more about the story of GDP are advised to consult Diane Coyle’s important book GDP: A Brief but Affectionate History.
Now, on the very rudimentary level of a comparison between the economic condition of Indians and Britishers we want to look at the per capita GDP of those countries because total GDP says nothing about the economic condition of Indians and Britishers. Although per capita GDP is an average statistic and it hides the economic inequality – which is huge in India where vast majority of Indians are hungry and poor while at the same time there are quite a few billionaires in the world’s top billionaire lists from India – still it gives a rough picture of the economic conditions of the Indians and Britishers. I am going to carry out this comparison below using some basic statistics.
Although India’s nominal cash GDP is now higher than UK’s GDP that doesn’t convert into higher per capita income of Indians compared to Britishers. According to the World Bank data, India’s per capita GDP is US $2,277.4 while UK’s is US $47,334.4! Why is this? Because India’s population is 1.4 billion while UK’s population is only 67.3 million. Now, the supporters of Modi government can say that because UK’s population is so much smaller compared to India’s, this is why their per capita GDP is 20 times bigger than India’s. To such people I only ask one question: Are Britishers responsible for India’s higher population? And somehow even if Britishers are responsible then what are we going to do about it now? We cannot ask Britishers to lower India’s population! Only Indians can reduce India’s population if they think their population is a problem. Blaming Britishers for everything is not going to solve India’s problems.
As the above comparison of per capita GDP shows, India is nowhere near the level of economic prosperity of Britain. Indians are still dirt poor – relatively and absolutely – and Britishers are super wealthy. The standard of living that Britishers enjoy, Indians cannot even imagine. This is one of the major reasons why many Indians are desperate to immigrate to UK (and other developed first world countries like USA, Canada, Australia etc.).
In fact, the road ahead for Indians is long and arduous. If at all they want to achieve the level of economic prosperity of average Britishers or want to overtake them then they need to leave their hypocrisy and hubris behind and focus on doing the necessary hard work. Achieving UK’s per capita GDP is only possible in two ways: either Indians reduce their population to the level of UK or increase the size of their economy to the level where the per capita income of an average Indian overtakes Britisher’s per capita income of US $47,334.4. Reducing population is impossible. All population projections are showing that pretty soon India will overtake China as the number one country in the world in terms of its size of population. India’s population is projected to stabilize at the level of some 1.6 billion people by 2050, and only after that its population will start to decline in absolute size. Even if famine or some disease like plague will hit India I do not think it will kill so many people that its population will come down to the level of UK’s population. This only leaves open the other option of increasing the size of India’s economy. With 1.4 billion people India’s economy must become US $17 trillion to achieve the UK’s per capita GDP level. Basic calculation shows that if Indian nation state took 75 years to achieve the total GDP of US $850 then at the same pace it will take another 1500 years to achieve UK’s per capita GDP level! Even if GDP growth picks up pace to double digits it will take hundreds of years to reach and overtake UK. No nation state survives for that long so we can safely assume that the dream of achieving UK’s economic prosperity for Indians is only a pipe dream; a delusion which can give votes to the prime minister but does nothing to improve the day to day lives of billions of Indians.
Our basic calculation and the understanding of India’s ground reality tell us that India will never leave UK behind in terms of economic performance and otherwise. Indians and other third world country immigrants might destroy UK, but India will never rise to the level of UK’s achievements. India’s prime minister is wrong in claiming that India has left behind UK and he is either ignorant or malfeasant. He either doesn’t know his economics or is deliberately misguiding the Indian public. The past history of Narendra Modi and his government tell us that they are evil in their intent. In a country where poverty and hunger are now rising, where millions still live on less than US $2 a day, where a combined population of US and Russia are unemployed, where every economic problem is becoming worse day by day, to claim or even to compare India with first world countries like UK or USA is not only wrong but is very harmful.