By 2030, India could well cross Japan to become the second largest economy in Asia.
New Delhi: The world has witnessed the bane of the Covid-19 pandemic where economic activities had come to grinding halt, pushing even the major economies of the world into doldrums. Despite the many challenges posed to the economic situation in the last two years, India’s economic situation is marching way ahead compared to the majority of the developing nations. The Reserve Bank of India has pegged India’s economic growth rate for 2022-23 at 7.8%. India is Asia’s third largest economy and it is expected that India will reach the 3 trillion-dollar economic size in the next coming years. It is also projected that by 2030, India could well cross Japan to become the second largest economy in Asia.
The International Monetary Fund (IMF) has projected India’s GDP growth rate at over 9% for 2022. Data from the World Bank and the Asian Development Bank data, also projects that the economic growth rate for India would be between 7.5 to 8.3% in this fiscal year (2022-23).
Compare this with the other nations in the South Asian region. Bangladesh, Pakistan, Bhutan, Nepal and Sri Lanka, the GDP growth rate of all these countries is likely to be below the 5% mark, except for Bangladesh, which is likely to clock a 6.6% GDP growth rate in the current year. The Asian Development Bank’s data shows that the economies of our immediate neighbours like that of Pakistan and Sri Lanka are in deep trouble. While Pakistan is facing a dual problem of economic downhill and political commotion, Sri Lanka is witnessing its worst economic crisis in decades. The ADB’s data shows that Sri Lanka is expected to only clock a 2.5% growth in the GDP in 2022, while Pakistan’s GDP is expected to grow just at 4% in the same year.
The World Bank’s data also portrays a similar picture for these countries. According to the World Bank data, Sri Lanka is expected to have a GDP growth rate of 2.2% while Pakistan is to have just a 3.4% growth in their GDP this current year.
Bangladesh, which was clocking a GDP growth rate of over 8% till 2019, has fallen further down. The ADB and World Bank projection shows that Bangladesh is yet to recover fully from the Covid 19 pandemic induced economic crisis. The ADB data shows that Bangladesh will register a GDP growth of 6.9% for 2022, while the World Bank shows a 6.4% economic growth.
Countries like Nepal and Bhutan are also expected not to grow much in the coming two years. The economic growth projection for these two countries by the ADB and World Bank shows that the GDP growth rate would not cross the 4.5% mark in the coming two years.
On the contrary, India’s growth rate is even higher than that of the average growth rate of the South Asian countries. According to the ADB data, while on an average the GDP growth rate of South Asian countries is likely to be 7%, India’s growth rate for 2022 would be 7.5%, while for 2023 India’s GDP is expected to grow at 8.2%.
The World Bank in its report for South Asia economic growth stated, “India’s economy, South Asia’s largest, is expected to grow by 8.3 percent in the fiscal year 2021-22, aided by an increase in public investment and incentives to boost manufacturing.”
Even the former Governor of the Reserve Bank of India, Bimal Jalan earlier this week said that the Indian economy is in a very good shape and that there would not be much impact of the Russia-Ukraine crisis on the Indian economy.
Dr S.P. Sharma, Chief Economist with the PHD Chamber of Commerce and Economy, also told The Sunday Guardian that India’s economy is far better than its neighbours. He said, “India is one of the fastest growing economies in the world. We are projected to have more than 8% growth rate this year, which is fantastic. Our economic growth is intact and is moving in the right direction, in fact in the next 5 to 6 years, we are expected to reach the five trillion-dollar economy.”
Dr Sharma also said that the Indian economy is not likely to be impacted by the Russia-Ukraine crisis, except for some rupee inflation and crude oil price increase, which is also likely to subside in the coming months.