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India displaces Japan to become third-largest world economy in terms of PPP: World Bank

Discussion in 'World Economy' started by Soumya, Apr 30, 2014.

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  1. Soumya

    Soumya Major STAR MEMBER

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    NEW DELHI: India has displaced Japan to become the world's third biggest economy in terms of purchasing power parity (PPP), according to a World Bank report released on Tuesday.

    The 2011 round of the bank's International Comparison Program (ICP) ranked India after the US and China. The last survey in 2005 had placed the country on 10th place.

    PPP is used to compare economies and incomes of people by adjusting for differences in prices in different countries to make a meaningful comparison.
    India's share in World GDP in terms of PPP was 6.4% in 2011 compared with China's 14.9% and the US' 17.1%, the latest ICP showed. The survey covered 199 economies.
    "The United States remained the world's largest economy, but it was closely followed by China when measured using PPPs. India was now the world's third largest economy, moving ahead of Japan," the report said.

    Despite high inflation in India in recent years, prices in the country are still well below those in advanced economies, explaining the higher raking for India on the PPP measure. But according to the International Monetary Fund (IMF), India's economy is 12th largest and only about a third of Japan's in terms of absolute unadjusted dollars. "The economies with the lowest prices are either in Africa or Asia and the Pacific and include India, which has the third-largest economy," the report noted.

    "Because economies estimate their GDP at national price levels and in national currencies, those GDPs are not comparable. To be compared, they must be valued at a common price level and expressed in a common currency," the report said, giving out the rationale for the PPP adjustments.

    [​IMG]

    example, people in a country with higher average per capita income may not necessarily have a better quality life than a country with lower average per capita income.

    This makes it a good tool to compare poverty levels across countries.

    "One major use of PPPs is poverty assessment using the World Bank's international poverty threshold of $1.25 per day per person. National poverty assessments differ because the purchasing power of national currencies differs from one economy to another," the report said.
    In terms of per capita GDP, even in PPP terms, India ranks very low at 127 in the 199-country ranking.

    "The largest economies were not the richest, as shown in the ranking of GDP per capita. The middle-in-come economies with large economies also had large populations, setting the stage for continued growth," the report noted.

    In the latest ranking, India's economy was 37.1% of the US economy compared with 18.9% in 2005.
    The report said in terms of spending power, the differences have come down.

    "The spread of per capita actual individual consumption as a percentage of that of the United States has been greatly reduced, suggesting that the world has become more equal," it said but cautioned some of this could be due to changes in the methodology.

    India displaces Japan to become third-largest world economy in terms of PPP: World Bank - The Economic Times

    Next target: Nominal GDP
     
  2. sangos

    sangos Lt. Colonel ELITE MEMBER

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    Way to go to grow to at least 10X size. NaMo bring it on.:biggthumpup:
     
  3. vstol jockey

    vstol jockey Colonel MILITARY STRATEGIST

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    Indian economy is presently about 1.8 trillion USD. The moment rupee appriciates to 50, this economy will be the fourth largest in terms of USD and the per capita income in USD terms will make india jump to a place below fifty. Thanks to 10 yrs of UPA rule, all we gained has been squandered away.
     
  4. Himanshu Pandey

    Himanshu Pandey Don't get mad, get even. STAR MEMBER

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    with rs down by almost 20 % if we are third its not too bad... with rs gaining its strengh and getting again near to 45 mark... we will almost grow 25 %... and for rest there is modi.
     
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  5. Marqueur

    Marqueur Peaceful Silence ELITE MEMBER

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    per sir ji ... USD days are numbered (due to gamble in Ukraine ) ... shouldnt we start offloading dollar slowly and prepare for dollar collapse
     
  6. vstol jockey

    vstol jockey Colonel MILITARY STRATEGIST

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    We must, but dont you think that those countries who have large exposure to dollars will go below us in ranking much faster like china.
     
  7. Himanshu Pandey

    Himanshu Pandey Don't get mad, get even. STAR MEMBER

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    the economy is going to take a sharp turn in few years.. good or bad will be based on the decision we make today.
     
  8. Himanshu Pandey

    Himanshu Pandey Don't get mad, get even. STAR MEMBER

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    the economy is going to take a sharp turn in few years.. good or bad will be based on the decision we make today.
     
  9. ricky123

    ricky123 Captain FULL MEMBER

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    PPP means nothing dont celebrate on its ranking ... we have a long way to go ... its true Cong screwed us bad . but we are looking at a hung house this time .. even if BJP comes to power we will only see growth in infrastructure . i hope who ever leads the country next also increases spending on education ,health services.
    education is the most neglected in our country ...i am not talking about urban areas but rural ...
    we need to ban exports or atleast limit the exports of essential commodities .every1 knows what happened last yr with the onion prices ... scrap the food security bill ..distribute benefits directly to end users using the UID aadhar cards .. increase and improve the storage of food grains ... help the farmers to sell thier goods directly to the market rather then relying on the middle man ... and we also need to cut down on the huge bureaucracy .. last time i went to get a license i had to stand 1 hr in 3 different ques .one for submitting documents .one for physical examination and other to get the digital signature and photo.... these things happen every where ..
     
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  10. randomradio

    randomradio Colonel REGISTERED

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    We need to focus on investment. And when it comes to investment UPA has failed.
     
  11. Gessler

    Gessler BANNED BANNED

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    They haven't been particularly successful in other sectors either. Any gains made were merely short-term.
     
  12. ricky123

    ricky123 Captain FULL MEMBER

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    i hope BJP doesnt go back to its disinvestment schemes like they did last time
     
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