Among the many MBA concepts related posts we’ve written, in the introductory Economics sections, we’ve also touched upon the basics of GDP (full-form, definition etc).
We thought it would be interesting to dig deeper to look at GDP in India and contrast India GDP numbers with the GDP of countries that we generally get compared with.
Let’s set the basic benchmark before we bring in the GDP of other countries by jumping straight to the basic question. What is the GDP of India?
At the time of publishing this post, the current GDP of India is roughly around 1.877 Trillion USD (US Dollars). When we say ‘current’, we’re referring to the previous year’s number (i.e. GDP of India in 2013 December). We’ll get to know the GDP of India in 2014 soon.
If you prefer desi currency, that puts the GDP of India in Rupees at a little over 11 million crores. Good luck trying to figure out how many zeroes are in there.
Here’s a snapshot depicting the GDP of countries based on December 2013 data (Data Source: World Bank).
You’ll find the India GDP at Number 11. Considering the global competition, that’s not too bad, eh?
Well, depends on what you were expecting. Spend a little time looking at the table and some interesting insights will emerge.
After 10 minutes of staring at the table, if the insights seem elusive, here are some pointers.
Among the BRIC economies (Brazil, Russia, India and China), India GDP lies at the bottom of the league table. Though Russia and Brazil aren’t too far ahead, the GDP of India and China highlight the big gap.
With all the rhetoric that newspapers and news channels throw at us, we might want to believe that we are just a few notches below the dragon. Not true.
China’s GDP (and hence its economy) is about 5 times as big as the current GDP of India in 2013-2014. The biggest economy (USA) is about 9 times as big as ours.
Let’s forget absolute numbers for now and look at relative growth charts. We’ll keep things simple and knock out most of the GDP of most other countries. Just compare the GDP of India and China.
The GDP growth of India looks pretty tame compared to China’s GDP growth. There’s a HUGE gap between the two leading Asian economies and it’s only growing.
We tried to include the GDP growth of USA in the graph to put things in context and show the big picture. But the giant was dwarfing all the other line charts. So, we looked to our left and right, and when no one was watching, we de-selected it.
For the optimistic ones who prefer looking at the half-full glass (without bothering much about what’s in the glass), the silver lining is that the GDP growth of the UK isn’t too different from India’s.
Just about 20 years back (that’s a relatively short time-frame in the timeline of major economies), Chinese and Indian GDP numbers were quite similar.
But China probably got bored and felt that they needed to add some spice to their trajectory. That’s when their explosive and exponential GDP growth started and continues to this day.
The India GDP growth has stagnated over the last few years. And the huge scams (with a scale and magnitude that regular human brains can’t fathom) haven’t exactly helped.
The bottomline is that there’s a lot of work still left. And plenty of scope to grow as well.
Will the GDP of India in 2015 – 2016 be significantly different from the last few year’s trends? We’ll have to wait and watch. How the (not-so-new) government manages the economic policies and all the potential roadblocks will have a big influence on the India GDP statistics in the years to follow.