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The Indian economy has come a long way in recent years. But of late, the economy has collapsed due to the Corona epidemic. Especially in the recent news published in various outlets, all hopes for the Indian economy have turned to despair this week.
India’s per capita national growth may be lower in 2020 than in neighboring Bangladesh. India is naturally disappointed with this news. Kaushik Basu, the former World Bank chief economist, tweeted about this after the International Monetary Fund (IMF) updated its world economic outlook.
“It is good news that any emerging economy is doing well,” he said in a tweet. But it is surprising news that India is lagging behind now. “This is not good news for those whose economy was 25 percent ahead five years ago,” he said.
Ever since India’s economy opened in the 1990s, the country’s dream has been to compete with the rapid growth of China. After three decades of efforts, India is lagging behind Bangladesh.
This has damaged the image of India in the world. The West expects a significant counterattack against China. But that partnership does not mean that India will fall into the lower-middle-income trap.
Relatively low efficiency can damage trust. India, the small country that engaged in the war against Pakistan in 1971 to gain independence, is now losing to power-hungry India. This could erode the influence of India in South Asia and the Indian Ocean region.
Bangladesh is overtaking India in GDP per capita (gross domestic product) in the current financial year due to the coronavirus epidemic. Bangladesh has been on the rise since the International Monetary Fund (IMF) recently published this information in the World Economic Outlook.
According to the latest World Economic Outlook report, Bangladesh’s GDP per capita will rise to £ 1,096 in fiscal 2020, 3.96 percent more than last year.
By contrast, India’s GDP per capita for the current fiscal year will be £ 1,006, which is at least 10.3 percent less than the previous fiscal year.
Even a few years ago, India was ahead of Bangladesh in terms of GDP per capita. But through continuous improvement, Bangladesh has rapidly narrowed that gap.
Where did India go wrong? These questions arise now. Of course, the coronavirus epidemic is blamed for this. In mid-June, new infections peak in Bangladesh. On the other hand, the number of daily infections in India has been decreasing for a few days after recording the highest number of infections compared to any other country.
The population of Bangladesh is approximately 16 million rupees. Of them, the Covid-19 died a little less than 5,600. On the other hand, there are eight times more people in India than this population. The death toll there is 20 times higher than in Bangladesh. To make matters worse, the coronavirus has caused serious damage to the economy due to the imposition of the blockade in India.
Bangladesh is fine. This is because they have kept exports of their products less efficient. This problem is related to the workforce in poor countries. Vietnam is slightly ahead of Bangladesh. But fundamentally, both are learning from China. By dominating through the production of low-skilled goods, they have maintained high GDP growth.
If they want to beat China in the position that India is in now, they must first beat Bangladesh. India exports high-quality products and services, such as computer software. But China, known as the factory of the world, is now providing opportunities to others below.
Not just in the healthcare sector or well-educated workforce, China is taking advantage of the relatively cheap. India has opportunities in these areas. It’s also one of the biggest headaches in India after Corona, facing the urgent challenge of at least 6 million jobs year-over-year, according to a report on Bloomberg’s opinion page.
TTN / MKH
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