India’s GDP (GDP) can go up to -10.3 percent this year, since the International Monetary Fund (IMAF) estimates have come out, Bangladesh’s GDP is being discussed more than India’s GDP in the country.
The IMF also estimates that Bangladesh will overtake India in the coming days in per capita GDP. On this issue, Congress leader Rahul Gandhi also tweeted a tweet on Wednesday.
He wrote on Twitter, “This has been the most tangible achievement in the last six years of the BJP government’s hated cultural nationalism: Bangladesh is also going to leave India behind.”
Along with this, he also tweeted a graph, which showed a comparative study of GDP per capita of Bangladesh, India and Nepal.
This graph shows GDP per capita of $ 1876.5 in Bangladesh for the year 2020 and $ 1888.0 for India.
Eminent economist Kaushik Basu wrote on Twitter, “According to IMF estimates, Bangladesh will surpass India in per capita GDP in 2021. Countries with emerging economies are doing so well, this is good news. But India’s These figures are shocking. Until five years ago, Bangladesh was 25 percent behind India. The country needs bold fiscal / monetary policy. “
How accurate is the GDP of India, Bangladesh
The International Monetary Fund has estimated -10.3 percent of India’s GDP, while for Bangladesh it is 3.8 percent. Apart from Bangladesh, positive estimates have been made about the GDP of China and Myanmar.
In terms of economy, China has always been better than India. That’s why people are now starting to compare India with Bangladesh.
In such a situation, it is important to know that this comparison is not a comparison between apples and oranges.
After Rahul Gandhi’s tweet, there was news in Indian media quoting government sources that India’s population is 8 times larger than Bangladesh. Secondly, in 2019, India’s purchasing power parity was 11 times more buying capacity. Meaning that this statistics of Bangladesh is a ‘temporary’ thing, India need not panic.
Per capita GDP indicates how much per capita economic output in a country. It is calculated by dividing the total GDP of a country i.e. the GDP of that country.
It is clear that the country whose population will be more, the data for that country will be less. This is straightforward math.
Professor Prabir Dey is a knowledgeable of international trade and economy. He is a professor in the Research and Information System for Developing Countries (RIS) in India.
In a conversation with the BBC, he says, “These figures are only being driven by politics. They believe that India’s decline is temporary. It will see improvement in a short time. This is because Bangladesh’s economy is India “The economy of Bangladesh is currently around US $ 250 billion, while India’s economy is around US $ 2.7 trillion.”
He says that first of all, know that the IMF does not extract this data by itself, but rather the member countries of the United Nations share their GDP figures with them, on the basis of which they make estimates.
Secondly, because of Corona, India’s GDP was the most affected in South Asian countries during the first quarter. It (minus) had reached -23.9 percent. While the decline in GDP of Bangladesh and China was much less than that of India. The level of lockdown imposed in India was not like that in other countries. The effect of this has also been seen in the latest IMF estimates.
But Prabir Dey also says that the economy of Bangladesh is growing rapidly, there are no two opinions in it.
After independence from Pakistan in 1971, Bangladesh has suffered many tragedies. 1974 saw a terrible famine, Bangladesh is reeling from terrible poverty, natural disaster and now refugee crisis. Millions of Rohingya Muslims have left their homes from neighboring Burma and moved to Bangladesh.
The population of Bangladesh is around 17 crores.
Two things are the biggest contributors to Bangladesh’s economy. The first one sent money to the textile industry and second to those working abroad.
Bangladesh is making rapid progress in manufacturing sector. In the textile industry, Bangladesh is second only to China. Export of garments made in Bangladesh is growing at the rate of 15 to 17 percent per annum.
In 2018, clothing exports reached $ 36.7 billion by June. Prime Minister Sheikh Hasina aims to reach $ 50 billion when Bangladesh celebrates its 50th anniversary in 2021.
On the other hand, the manufacturing sector in India has seen the biggest decline in the past. Manufacturing sector growth in the first quarter was -39.3%.
About 2.5 million Bangladeshis working abroad also have a big role in Bangladesh’s economy. The money they send from abroad is increasing by 18% annually and in 2019 this amount reached 19 billion dollars.
But due to the Corona epidemic, both areas have a negative impact.
Corona’s condition in Bangladesh
The first case of Corona in Bangladesh came on 8 March 2020. On 23 March 2020, the government announced that there would be a government holiday from 26 March to 30 May. Banks were working there, only for a short time. On 8 April, government restrictions were also imposed in Rohingya Camp. From May 31, most things in Bangladesh were opened.
Whereas the first case of corona was revealed in India in late January. The entire lockdown was imposed across the country from 24 March 2020. Before that many states started imposing other restrictions at their respective levels.
During the first lockdown, economic activities were relaxed in some areas from 15 April 2020. At the same time, until September 30, due to the corona epidemic, there were some restrictions.
According to the IMF, the economy of Bangladesh has been the most affected during the Corona era for two reasons. The first is a reduction in remittances (those who send money to countries working abroad). Remittance money is 5 percent of their country’s total GDP.
The second reason is the decrease in their readymade garments exports. The export of readymade garments is 80% of Bangladesh’s total exports. Apart from this, rains and floods have also caused a lot of damage to agriculture there.
At the same time, for India, the IMF has attributed the huge fall in GDP to the Corona epidemic and the nationwide lockdown.
How Bangladesh’s economy is flourishing
The 2013 Rana Plaza disaster was nothing short of a major setback for Bangladesh’s textile industry. This multi-storey building of the clothing factory had collapsed and 1,130 people were killed in it. After this, international brands of clothes were forced to make many reforms.
Since then, the Bangladesh government has made many changes in the rule of law, factories have been upgraded and many steps have been taken to improve the condition of the workers working in it.
In Bangladesh, sewing of clothes is done on a wide scale and it also includes a large number of women. Automated machines have been in use since 2013.
Professor Prabir Dey believes that there are many reasons for the economy of Bangladesh to flourish.
The first thing is that Bangladesh is still in the list of developing countries. Meaning there is still room for development.
Secondly, Bangladesh does not have differences like India. In India, the central government says one thing, sometimes the Maharashtra government opposes it, sometimes Punjab and sometimes Delhi.
All that the Prime Minister has said in Bangladesh is obeyed. Political opposition also takes place there, but there are not divisions like India on the basis of domicile, caste, language, state.
The third thing says economist Kaushik Basu. There is also a rapid empowerment of women. The politics of Bangladesh has been dominated by two women, Sheikh Hasina and former Prime Minister Khalida Zia. The participation of women in the textile industry is also good. When women are ahead in the society, then progress in the society is better. Prabir Dey also believes so.
The fourth thing that is in favor of Bangladesh is their market value. Made in Bangladesh clothing is different and good identity all over the world. For this, the governance system of the Government of Bangladesh should be given credit. Once the country to which Bangladesh sells goods, that country again goes to Bangladesh.
The GDP of any country depends on how much the people and the government have to spend money. The government there has given attention to water, electricity, banks in rural areas and all these arrangements by running different schemes.
The government showed this expenditure in its account and that is why the GDP figures are better.
However, Prabir Dey says, “Bangladesh is a little behind in FDI” and “Ease of Doing Business”. For projects there is no facility of fast track clearance. In Bangladesh, the government allows on a case to case basis. Still in Corona In the period, 16 Japanese companies have set up their industry in Bangladesh after leaving China. Recently, Honda company has set up a plant 30 kilometers away from Dhaka. All these things show that to do business with the government there. Other countries are interested. Local companies are called ‘Bhoomiputra’ there. Such companies are also flourishing in large numbers there. ”
How GDP growth of Bangladesh is better than India? Prabir answers this in a line.
“The government of Bangladesh has tried to climb up the ladder path to improve the economy, not the lift path like India. You can stop at one place due to technical fault in the lift, but if the ladder is up and down it will be more Is easy. “
This is the basic difference between the economy of both the countries.