In 2011, the gross
world output in nominal terms, i.e. calculated as the population times the
wealth per capita, stood at US$ 69. 98 trillion. Of this the United States accounted for US$ 15. 09 trillion (21.56 %) and India’s
share was US$ 1.84 trillion (3.75
%). The gross domestic output of China was US$ 7.31 trillion
constituting 10.44 % of gross world output. There is considerable
variation in the proportion of gross world output on the basis of purchasing power parity (PPP), i.e. adjusted for differences in the cost of living in
different countries. It is true that recently China and India have been growing
fastly and if the recent trends continue over a long period, India’s GDP will
increase enormously. But to surpass the GDP of US India has to grow at a high
rate (around 9-10%) continuously for a very long period, say many decades,
while the growth rate of the US economy will have to hover around or remain
below the current rate of growth ( 2.3
%). Historically continued high rate of growth of GDP for a very long period is not feasible; for
cyclical changes may cause distortions in the growth performance. Moreover, if the
present level of bribery, corruption, misappropriation and embezzlement of
public funds persist, it will be very difficult for India to sustain the level
of high growth rate for a long time. Moreover, staging away a large proportion of the county’s output in
foreign countries by politicians and crony capitalists will deprive the country of the investment requirements
to sustain high growth rate. In order to reach the current level of GDP of the
US by the end of the present century India has to grow at around 8% per annum.
By the time the US will also continue to grow moderately ant the current rate
of 2.34%, the economy of United States would be more than treble that of the current level of US$ 15.
09 trillion. But at present the per capita income ( nominal) of Indians ( US$
1,514) is abysmally low compared to Americans US$ 48,328.
The position is slightly better when comparisons of per capita incomes
is made on the basis of purchasing power parity (PPP), to adjust for differences in the cost of
living in different countries( US$ 48,442 for America
and US $ 3,652 for India. According to OECD, India’s economy is expected
to be bigger than the United States over the "long term.” Moreover by 2100 India’s population would
have reached around 1.6 trillion while
that of the US will be around 0.4
trillion; i.e almost ¼ of India’s
population. The OECD projection of the performance of Indian economy over a
long period is unrealistic. It looks like paid news indented to boost the
morale of the reformists.
Dr.C.Murukadas, The
Times of India, Nov.8, 2012
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