INDIA: The Rising Giant

India now is the 5th largest economy in the world, replacing the United Kingdom. Itu2019s not only that, with the current Indian growth in the economy it is said that the gap between India and UK will only widen. To put this achievement into context, let us inform you that nearly a decade ago India was ranked 11th while the UK was at the 5th position. Now, India is the fastest growing major in the world with 13.5% growth in the April-June quarter. 
The countries ahead of India are Germany, Japan, China, and the US. How Did India Manage to Overtake the UK?Pent-Up Demand Ever since the pandemic regulations have been eased, people have gone bonkers with their spending, the spending obviously has helped India to achieve a higher growth status while the rest of the world worries about the recession. The accumulated money and the satiated feeling from staying at home, both were big contributing factors to India’s huge consumption. It is also said that with the upcoming months being filled with festivals, the service sector is set to see a strong bounce back.
ufeffSource: International Monetary Fund
Reality Check Now time to pop the bubble.Yes, it’s an incredible feat for India to be ranked 5th amongst the major world powers but it is still a known fact that India, despite being one of the outperformers on the global scale, India has a lot of issues within. We celebrate that weu2019ve overtaken the UK but the cold hard truth is that Indiau2019s per capita GDP is at 2,500 Dollars while UKu2019s per capita GDP is at 47,000 Dollars because of the massive population gap we have, Indiau2019s population is 2,058% greater than UKu2019s population.Closing the gap in terms of per capita GDP is the real challenge.Now talking at a much more grounded level, the manufacturing sector also seems to be slowing at a growth of just 4.8%. This is an alarming stat and needs to be taken seriously only because of the fact that India’s manufacturing still being at an early stage and is not able to catch momentum. With inflation being high throughout the world, India faces the danger of high commodity and oil prices which could further affect the demand of the consumers. Consumer demand and spending make up 55% of India’s total economic activity, this makes inflation a pressing issue.But despite all these issues, India is a fierce force to reckon with who’s proven to come out of adversities on top.