Reality check: Indian economy is not larger than that of the UK -TCA Sharad Raghavan

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published Published on Dec 23, 2016   modified Modified on Dec 23, 2016
-The Hindu

The claim made by a magazine and carried by sections of media is not backed by data.

The claim that the Indian economy has overtaken the U.K. economy in terms of absolute size, as made by a contributor to Forbes magazine and carried by sections of the Indian media, is not backed by data, an analysis by The Hindu of GDP data from the International Monetary Fund (IMF) and the Government of India, and currency data from the central banks of the two countries shows.

GDP figures

The Forbes report, authored by a former McKinsey consultant and current student at Tsinghua University, says that the U.K.’s GDP in 2016 was £1.87 trillion which, given the 20 per cent decline in the value of the pound over the course of 2016, translated to $2.29 trillion. The report cites India’s 2016 GDP as being Rs. 153 trillion, which converts to $2.30 trillion at an exchange rate of Rs. 66.6 a dollar.

While the GDP figure cited for the U.K. is corroborated by data from the IMF and the currency rate of 0.81 pounds to the dollar used in the calculations is backed by data from the Bank of England, the data for India does not match up.

“There were basically two considerations, the nominal value of GDP of both countries and the currency exchange rates,” D.K. Srivastava, chief policy advisor, EY India, told The Hindu. “Our estimates show that the GDP for 2016 would be at Rs. 149 trillion rupees. We are looking at the provisional actuals of last year and applying our estimate of the growth rate.”

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The Hindu, 22 December, 2016, http://www.thehindu.com/business/Economy/Reality-check-Indian-economy-is-not-larger-than-that-of-the-UK/article16925514.ece


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