India's economic rank: Contextualising GDP numbers—what it tells us and what it doesn't
Rank
Country
GDP per Capita ($)
1
Luxembourg
145,826
2
Ireland
143,179
3
Singapore
138,545
4
Macao SAR
125,511
5
Qatar
118,148
:
:
:
143
India
2,754
Rank
Country
Nominal GDP ($ Trillions)
GDP Per Capita ($)
GDP Per Capita Rank
1
US
30.51
89,678
10th
2
China
19.23
13,873
73rd
3
Germany
4.74
57,914
17th
4
India
4.19
2,754
143rd
5
Japan
4.19
35,611
39th
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On May 25, B.V.R. Subrahmanyam, CEO of NITI Aayog, announced that India has become a $4 trillion economy, making it the fourth-largest economy in the world in nominal terms. This is a significant milestone, and when viewed through the purchasing power parity (PPP) lens, India is already the third-largest economy, with a PPP-adjusted GDP of approximately $17 trillion. While such rankings certainly catch attention, they also invite us to consider an important question: To what extent does this economic standing reflect the everyday experiences and well-being of the average Indian?When we consider per capita GDP, the story becomes more nuanced. The top countries in terms of per capita GDP include Luxembourg, Ireland and Singapore. Interestingly, none of these countries appear in the top five in terms of nominal GDP, and India ranks 143rd globally in this metric. The reason? While nominal GDP reflects the overall size of an economy, per capita GDP provides insight into the average income per individual. The latter offers a better sense of individual prosperity or standard of living; however, these figures do not fully encapsulate the nuances of income distribution within the country.To put things in perspective, for India to match Singapore's per capita GDP of $138,545 and enter the top 3, India's total GDP would need to be around $194 trillion, roughly 50 times its current nominal GDP. As of 2024–25, India's per capita income is estimated at $2,754 annually or approximately $230 monthly. To reach the World Bank's high-income country threshold of per capita income of $13,846 by 2047, India's per capita income must grow at a compound annual growth rate of approximately 8%.The other primary concern is income inequality. According to the World Inequality Lab, the top 1% of India's population earns 23% of the total income, while the bottom 50% earns just 13%. When we adjust for this inequality, the top 1% have a per capita income of about $64,670 per year or $5,389 per month, and the bottom 50% earn only about $733 per year, or approximately $61 per month. This stark contrast illustrates that while India's economic progress is commendable, the fruits of growth are far from evenly shared. As India climbs the GDP rankings, the more pressing challenge is ensuring prosperity reaches every layer of society.
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