INDIA’S ECONOMY (Syllabus: GS Paper 3 – Economy)

Context: India's economy 16.5 years behind China's, says Bernstein research report.

• According to International Monetary Fund (IMF) estimates, India should move into fourth place by 2025 and third by 2027 with an economy size of $5.4 trillion

Key Points of Report

• Its report found that India is behind China by 21 years when it comes to patents, 20 years in FDI, 19 years in forex reserves, and 17 years in exports. 
• On nominal GDP and per capita income, India is 15 years behind. In consumption expenditure, it is 13 years behind. On gross fixed capital formation, it is 16 years behind.
• The gap is understandable given that, a decade ago, India’s GDP was only the 11th largest in the world.
• India would become the second-largest economy in the world by 2075, just behind China. It also estimated that by 2075, India’s GDP would rise to $52.5 trillion while China’s would be $57 trillion.
• The geopolitical tensions between the US and China have provided India with some new leverage — many global companies manufacturing in China are hedging their bets, and India has managed to persuade the likes of Apple to shift manufacturing capacity to the country and also export a large part of its production.
• India has not only surpassed China in population parameters but also witnessed China's net birth rate declining to zero and entering negative territory.