Not merely because by its estimation, India’s GDP is set to contract by over 10%, which is a scary statistic, to say the least. But that was still overshadowed by another reveal. According to the IMF, the per capita income of an average Bangladeshi citizen was all set to overtake that of an Indian citizen.
As per the World Economic Outlook report, Bangladesh’s per capita GDP in dollar terms is expected to grow by 4 per cent this year to $1,888, India’s per capita GDP is expected to decline 10.5 per cent to $1,877. The figures have sparked both anxiety and acrimony with Opposition parties immediately flagging concern. Congress leader Rahul Gandhi caustically tweeted: “Solid achievement of 6 years of BJP’s hate-filled cultural nationalism: Bangladesh set to overtake India.” And while it would be unfair to link this development to the ruling party’s cultural agenda, the fact is even those who continue to have faith in the economic policies of the Modi-led government have been shaken by the ‘downturn’ of events.
Is this really an all-time low for the Indian economy? Not according to former Chief Economic Advisor Arvind Subramanian. The erudite economist was succinct in his analysis. He says the metrics being compared were not appropriate, and Indians can heave a sigh of relief, as India’s per capita gross domestic product has not been surpassed by Bangladesh and he assures it is unlikely to happen soon. To understand the basis of IMF’s projection, one must understand that though countries are routinely compared based on GDP growth rate, or on absolute GDP, India has an economy that is over 10 times the size of Bangladesh’s.
However, per capita income also involves another variable, and that is the overall population. Which is one of the key reasons behind India’s poor results. While both countries showed rapid GDP growth till 2016, India’s population grew faster at approx 21 per cent as compared to Bangladesh’s population which was just under 18 per cent. And this was compounded by a sharp deceleration in India’s economic growth from 2017 onwards. The slippery slope that started with demonetisation, continues to haunt the country to this day. Throw in the pandemic, and India’s GDP could contract further, while Bangladesh is holding steady on its course.
At this point, it’s pertinent to study what Bangladesh got right, even as India misstepped. Though the neighbouring country struggled with natural disasters, low urbanisation, poor infrastructure and over-dependence on agriculture, in the last decade, by the simple act of drawing more women into the workforce, they cashed in on the global export markets by manufacturing garments. Women workers gave Bangladesh the edge in this sector, one that had been dominated by China for a long time. Interestingly, Bangladesh is ahead of India in gender parity rankings as well. With improved economic and educational opportunities Bangladesh stands tall in the top 50, while India is at 112th rank out of the 154 countries mapped. However, despite all the rapid strides it has made, Bangladesh is not without its problems political unrest and corruption threaten the nation’s stability every day.
In Bangladesh’s economic progress lies a lesson that India can well emulate. Of setting higher benchmarks, moving beyond legacy problems in social and cultural systems and spotting talent and strengths from within the country and using those to create opportunities. At a time when there is undeniable economic stress, acceptance of the challenges ahead would serve the country far better than splitting hairs over GDPs.