“Emerging economies are doing better than big economies, that’s a good thing.” But the shocking thing is that India, which was leading it for the last 5 years, is now lagging behind ”.
The central government is working on a plan to make the economy of the country $ 5 trillion by 2024, in such a way that it can be a huge blow to the economic front from a country like Bangladesh.
On the one hand, India is preparing to compete with China to become a manufacturing and export hub, on the other hand, its capita (per capita) GDP is becoming less than countries like Bangladesh. According to IMF report, India seems to be lagging behind its neighboring country Bangladesh. Recently, the International Monetary Fund (IMF) gave this information. According to IMF estimates, in 2020, per capita GDP in Bangladesh can be $ 1,888 (about Rs. 1,38,400), while in India it will be $ 1,877 (about Rs. 1,37,594).
India is lagging behind
Former World Bank economist Kaushik Basu wrote on social media after the data released by the IMF that the emerging economy is doing better than the big economy, it is a good thing. But the shocking thing is that India, which was leading it for the last 5 years, is now lagging behind.
Dream of India
According to Bloomberg, in the 1990s, when India began to open its economy to investment from around the world during globalization, India’s dream has been to compress China’s economic boom. But the recent IMF report may shock India’s dream in which India is lagging behind Bangladesh in terms of per capita GDP. Whereas, western countries such as the US and Europe are seeing India as a rival to China.
$ 5 trillion target
Currently, the central government is working on a plan to build the country’s economy by 2024 to $ 5 trillion. In such a situation, it can cause a huge blow by falling behind on the economic front from a country like Bangladesh. According to Bloomberg, this could also reduce India’s influence in South Asia and the Indian Ocean. In fact, this year India’s per capita GDP has fallen by 10%. While Bangladesh’s per capita GDP has increased by 4 percent.
Earlier, in terms of per capita gross domestic product (GDP), India was far above Bangladesh till few years back. But due to rapid exports in Bangladesh, its growth has changed significantly. Also, during the intervening period when India’s savings and investment were very sluggish, Bangladesh won it.
Corona epidemic effect
Certainly the economy of both countries has been affected by the Corona epidemic. But India has suffered more. Corona had the highest level in Bangladesh in mid-June. While Corona cases are still the highest in India. Bangladesh has a total population of 16 crore, of which the death toll from Covid-19 is 5.6 thousand. While the population of India is eight times that of Bangladesh and the death toll is 20 times.
Economy affected by strict lockdown
According to the IMF, the world’s strictest lockdown has been imposed nationwide since March to curb the corona epidemic in India. This wiped out real output in the country by around 10.3%. While the global economy is estimated to suffer losses of about 2.5 times. According to Bloomberg, the recovery in India may be delayed due to the fragile financial situation, underdeveloped financial system and risk of multi-investment.
Bangladesh gets support from cheap labor
Shoumitro Chatterjee and Arvind Subramanian said in one of their research papers that most of the population in Bangladesh is poor. The availability of labor is less than this. Export is also in good condition due to cheap labor. The same situation is with Vietnam. Actually, both these countries are following China. Because decades ago, China also had a similar situation. The manufacturing sector got a boost with cheap labour costs. The economy is also improving with this.
Need to change focus
Whereas India took a completely different path from this. About one billion population works in factories here. According to the research paper, most of the population in India works in the textile and textile sector, which is worth about $ 140 billion. It accounts for only 5% of the country’s GDP. Now if half of India’s software could not be exported in 2019, there would have been a ruckus. but that did not happen. Despite this, there was a loss of 60 billion dollars. Because it could not be exported due to low skilled production. Nobody paid attention to it nor spoke.
Share of women in labor force
According to Saumitro Chatterjee and Arvind Sabramaniam, country policy makers still do not know that even shoes and clothing factories could make money, which forced the closure. It could also generate employment on a large scale. He worked out a route from the rural area to the urban area, which requires jobs. It does not require high education and training. At the same time, three out of every five women in Bangladesh’s labor force are employed, which is double that of India. Whereas, the participation of women in India is 21%.
According to Saumitro Chatterjee and Arvind Sabramaniam, in India, Politicians are repeating years-old mistakes rather than making corrections. This will increase difficulties in domestic economy and export. The slogan of the 1960s and 1970s is suddenly being recalled by the discussions that are currently being held on jobs. However, this reduces disappointment that India’s export-based growth is better than all countries except China and Vietnam.
Opportunities for India
Actually, India exports a lot of high-skilled manufacturing goods and services such as computer software. However, now China has very little space left for other countries of the world. This is a better time for India.
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