Over the weekend Niti Aayog CEO BVR Subrahmanyam declared that India had overtaken Japan to become the fourth-largest economy in the world. He based this claim on data from the International Monetary Fund (IMF).
This claim reportedly led to two fairly divergent reactions.
First, a wave of self-congratulation among Indians who take this particular detail as a clinching argument that the government of the day has brought about a fundamental improvement in India’s economy.
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In nominal GDP terms, the Indian economy has made giant strides in overtaking some of the biggest economies. (Express Archives: Narendra Vaskar)
Over the weekend Niti Aayog CEO BVR Subrahmanyam declared that India had overtaken Japan to become the fourth-largest economy in the world. He based this claim on data from the International Monetary Fund (IMF).
This claim reportedly led to two fairly divergent reactions.
First, a wave of self-congratulation among Indians who take this particular detail as a clinching argument that the government of the day has brought about a fundamental improvement in India’s economy.
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Second, an examination of the claim and a counter-assertion, again based on IMF data, that India is still the fifth-largest economy, not the fourth.
As it often happens in these days of deeply polarised opinions, the discussion has fast reduced to a dialogue of the deaf.
Before answering, let’s broaden the scope of this explainer by making another claim (also based on IMF data): India is the third largest economy in the world, and, the fact is, it has been that way since Prime Minister Manmohan Singh-led UPA days.
Here’s the proof: Look at CHART 1. It shows India’s GDP (dark green line) breaking away from the rest of the bunch. India became the third largest economy in 2009, when it, curiously enough, overtook Japan.
An aside: There is one more pertinent break in this chart: It comes in 2016 when China overtakes the US as the largest economy in the world. The year 2016 is crucial as it was the year when the US first elected Donald Trump and what has followed since is a dedicated US policy to contain China’s growing economic might not just under Trump but also under President Biden.
Anyway, coming back to the status of India’s economy.