India has managed to overtake its erstwhile colonial master United Kingdom in terms of the size of the economy for the first time after nearly 150 years.
This dramatic shift has been driven by India’s rapid economic growth over the past 25 years as well downslide in the value of the pound over the last 12 months because of Britain’s recent Brexit-related problems, a report published in Forbes magazine said.
“Once expected to overtake the UK GDP in 2020, the surpasso has been accelerated by the nearly 20 per cent decline in the value of the pound over the last 12 months, consequently UK’s 2016 GDP of GBP 1.87 trillion converts to $2.29 trillion at exchange rate of GBP 0.81 per $1, whereas India’s GDP of INR 153 trillion converts to $2.30 trillion at exchange rate of INR 66.6 per $1,” the report said.
Interestingly, economic think-tank Centre for Economics and Business Research (CEBR) had, in December 2011, forecasted that India would become the “fifth largest by 2020” but India has crossed this significant milestone much sooner.
“Furthermore, this gap is expected to widen as India grows at 6 to 8 per cent p.a. compared to UK’s growth of 1 to 2 per cent p.a. until 2020, and likely beyond. Even if the currencies fluctuate that modify these figures to rough equality, the verdict is clear that India’s economy has surpassed that of the UK based on future growth prospects,” the report said.
Union Minister of State for Home Affairs Kiren Rijiju while celebrating India’s landmark, said, “India overtakes UK & becomes 5th largest GDP after USA, China, Japan & Germany.”
“India may have large population base but this is a big leap,” Rijiju added.
On October 8, this year, International Monetary Fund (IMF) too had predicted India to surpass Europeans by the end of the fiscal.