India has overtaken Japan to become the world's third biggest economy in terms of purchasing power parity (PPP), according to a World Bank report.
Between 2005 and 2011, India's ranking in the bank's International Comparison Programme (ICP) moved up seven notches from 10th place to third, according to the report released on Tuesday.
PPP measures incomes of peoples through comparative prices of different economies by adjusting for differences in prices so as to make a meaningful comparison.
The latest ICP survey, which covered 199 countries showed that India's share in World GDP in terms of PPP stood at 6.4 per cent in 2011 compared with China's 14.9 per cent and the USA's 17.1 per cent.
China's economy, which was less than half the size of the US, accounting for only 43 per cent of America's total in 2005, has grown much faster to 87 per cent of the US economy by 2011, according to the new study.
''The US remained the world's largest economy, but it was closely followed by China when measured using PPPs,'' says the 2011 report.
Against the 24 per cent growth that the Chinese economy is estimated to have logged between 2011 and 2014, the US economy is expected to have expanded by 7.6 per cent. China is likely to overtake the US this year.
''The economies of Japan and the UK became smaller relative to the US, while Germany increased slightly and France and Italy remained the same,'' according to data released by the ICP.
''The relative rankings of the three Asian economies - China, India, and Indonesia - to the US doubled, while Brazil, Mexico and Russia increased by one-third or more,'' the report said.
World GDP based on purchasing power parity (PPP) stood at to $90,647 billion, compared with $70,294 billion measured by exchange rates, the report said, adding that the share of middle-income economies in global GDP is 48 per cent when using PPPs and 32 per cent when using exchange rates.
The six largest middle-income economies - China, India, Russia, Brazil, Indonesia and Mexico - account for 32.3 per cent of world GDP, whereas the six largest high-income economies - US, Japan, Germany, France, UK and Italy - account for 32.9 per cent, the report said.
Asia and the Pacific, including China and India, account for 30 per cent of world GDP, Eurostat-OECD 54 per cent, Latin America 5.5 per cent (excluding Mexico, which participates in the OECD and Argentina, which did not participate in the ICP 2011), Africa and Western Asia about 4.5 per cent each.
''China and India make up two-thirds of the Asia and the Pacific economy, excluding Japan and South Korea, which are part of the OECD comparison. Russia accounts for more than 70 per cent of the CIS, and Brazil for 56 per cent of Latin America. South Africa, Egypt, and Nigeria account for about half of the African economy,'' said the report.
''At 27 per cent, China now has the largest share of the world's expenditure for investment (gross fixed capital formation) followed by the US at 13 per cent.
India, Japan and Indonesia follow with 7 per cent, 4 per cent, and 3 per cent, respectively,'' the report said.