Will Bangladesh overtake India on Per Capita this year?
Last week, India released latest GDP numbers. India’s per capita GDP is around $ 2000 . Bangladesh’s revised per capita in March this year is estimated at $ 1900. This is interesting because since PM Modi has come to power, India’s per capita growth in dollar terms was 34.4%, during this period, Bangladesh which moved to $ 1900 grew at double the rate of 71%
The RBI estimates India’s GDP growth to be negative in FY 2021.Even if we were to consider a growth of 0% (as some agencies have said 1-2%), India is likely to end up at $ 2000 in FY 2021. The World Bank estimates Bangladesh’s economy to expand 2 to 3% this financial year. This will take Bangladesh’s per capita to about $ 1947, still short of India.
Bangladesh has had 3 advantages over India – Low Population Growth, Favourable Trade Agreements and Low Cost of labour. Bangladesh also has a huge coastline, an advantage NOT available to the poorest States in India. That said, it looks like they will overtake India only in FY 2022 or may be even later as world trade is under huge risk this year. India still ahead but by a small margin.