Is India Taking a Quantum Leap ?

India emerged as sixth largest economy in

2017,surpassing France and likely to pass
United Kingdom
In 2017 India became the sixth largest economy
with a GDP of 2.60 trillion on the other hand
France GDP stood at 2.58 trillion
World Top 10
Economies

In the Year
2017
 What Recent Study Says about Indian
Economy ?
India leap-frogging over France to become the world's sixth largest
economy. And by the end of 2018, India is estimated to surpass Britain as
the world's fifth largest economy.
But what are the key-points which making India Lagging behind ?
India is still among the world's poorest countries with a per capita income of
just under $2,000 (Rs. 1.38 lakh). France and Britain each has a per capita
income of $40,000.
 What Makes India Behind in Current
Situation
 Per capita income should be measured in purchasing power party (PPP) terms just as GDP
routinely is calculated by both the International Monetary Fund (IMF) and the World Bank.
 What is Purchasing power parity: (PPP) is an economic theory that compares different countries'
currencies through a "basket of goods" approach. According to this concept, two currencies are in
equilibrium or at par when a basket of goods (taking into account the exchange rate) is priced the
same in both countries.
 In PPP terms, the World Bank estimates Indian GDP for 2017 at $9.45 trillion compared to $2.6
placing it as the world's third largest economy behind China and the United States and ahead of
Japan, Germany and Britain. Per capita income (PPP) in India thus concomitantly rises from
$2,000 in nominal terms at current exchange rates to over $7,000.
 Key Points to be looked at to improve current situation

 If per-day consumption is raised to realistic levels, the ratio of Indians mired in poverty would rise to 33 per cent.
 "The absolute poor in India today should be defined as those with a consumption level less than Rs. 75 per person
per day. This means that, at present, a third of the Indian population is absolutely poor.“
 As per a next national census in 2021 will likely estimate India's population at between 1.35 and 1.40 billion, China's
population has already plateaued at just under 1.40 billion.
 This has important consequences on per capita income. If Indian GDP growth continues at an average of 7.5 per cent
a year on near-zero population growth, future per capita income (measured as a fraction of GDP against population)
will increase far more rapidly than it has in past decades.
 The next key issue missed in contemporary analysis is the impact of a young, productive workforce on GDP growth
and increase in per capita income. While India's demographic dividend hasn't yet been the boon it was expected to
be due to low skill levels among the young, productivity is set to rise as education opportunities, including in
vocational training, expand.
 What Future Looks Like for Indian Economy
 Increasing GDP growth to over 8 per cent is clearly essential. At that level of annual
growth, GDP will double every nine years and quadruple in 18 years. At current
exchange rates, India's nominal GDP (excluding inflation) after 18 years will be $10.40
trillion, roughly similar to China's nominal GDP today ($11.20 trillion)
 If we go by PPP Norms then India's GDP after 18 years will quadruple from today's $9.45
trillion to around $38 trillion, higher than China's GDP (PPP) today ($23 trillion).
 Government need to keep its eye on reforms - tax, labour, agriculture, exports and
governance, employment if these factors are controlled Will India be able to make a
Quantum leap ?
Yes or No ?