India pips Britain to become world's sixth largest economy
21 Dec 2016
India's economy has reportedly overtaken the UK's for the first time in over 100 years on the back of a faster rate of economic growth and the economic slump in the UK after the June vote to detach itself from the European Union (EU).
India's economy now stands as the world's sixth-largest economy by GDP after the United States, China, Japan, Germany, and France, says a report in the Forbes magazine.
The Indian economy was expected to overtake that of the UK's in the year 2020 but the acceleration in ''surpasso'' came with the British pound falling nearly 20 per cent over the last 12 months, the report said, consequently UK's 2016 GDP of £1.87 trillion converts to $2.29 trillion at exchange rate of £0.81 per $1.
UK's 2016 GDP of £1.87 trillion converts to $2.29 trillion at an exchange rate of £0.81 per $1, whereas India's GDP of Rs153 trillion converts to $2.30 trillion at an exchange rate of Rs66.6 per $, the report added.
With this, the gap between the two big economies is further expected to widen as India grows at 6 to 8 per cent a year while the UK registers a growth of 1 to 2 per cent annually.
The milestone is a symbol of India's rapid economic growth and as much a symbol of the UK's post-Brexit slump.
In February, India surpassed China as the world's fastest-growing economy, and in October, the International Monetary Fund forecast India's GDP to expand by 7.6 percent through 2017.
The UK economy, on the other hand, is projected to grow by only 1.8 per cent in 2016 and 1.1 per cent in 2017. Moreover, with a limited market after it voted to leave the European Union, and a shrinking of the value of the British pound.
The gap between the two big economies is expected to further widen as India grows at 6 to 8 per cent a year while the UK records a much slower growth of 1 to 2 per cent annually.
India's economy benefitted from a global commodities price slump through large trade gains and lower-than-expected inflation, according to the IMF. And since elected in 2014, Indian Prime Minister Narendra Modi has driven sweeping market reforms to spur economic growth.
With more reforms like the proposed goods and services tax getting the Parliament's nod and the recent currency reform takes effect, the Indian economy is expected to grow even faster.
