According to the IMF (International Monetary Fund), the way India is seeing a steep fall in its GDP rate, the time is not far when it will fall below Bangladesh’s GDP. The nationwide lockdown, the lack of jobs, the pandemic situation has all added to the woes of the falling GDP. If the government doesn’t take strict actions sooner, India is surely going to face a major economic crisis in the coming years.
India’s GDP growth rate factor
The persistent fiscal deficits that India is currently experiencing would result in macroeconomic stress. India is now running at a GDP rate which is a major low in recent years. It might stoop so low that it may surpass its neighbor country Bangladesh in terms of GDP growth as per reports from IMF. But what comes as a sign of relief is that it also stated- “India’s per capita GDP is set to plunge to $1,877 this fiscal year ending on March 31, 2021.” They also reported that Bangladesh’s GDP is expected to grow to $1888 which is almost equal to India’s growth.
Comparison with Bangladesh
Things were not the same for Bangladesh a few years back. It struggled to manage its economy and did not have a boost to its GDP anyhow. However, in the past 2-3 years, Bangladesh has seen immense developments in sectors like education, health, and sanitation. It was a surprising revelation in the year 2018 when Bangladesh’s GDP growth was 7.9 percent as compared to the US’s 2.9% and India’s 6.8%. It has its most employment generation from the fields of agriculture apart from service sectors as well.
Sectors in which Bangladesh can beat India
The sectors where Bangladesh is gradually beating India are health, education, and sanitation. On the educational infrastructure of Bangladesh, UNICEF said they had ensured “universal access, gender parity in classrooms and reasonably high levels of completion” which is an appreciable move. Bangladesh also depends on migrant workers for larger economic growth. India must consider providing work permits to the Bangladeshis to increase the workflow rate and boost the economy.
The PolicyTimes suggestions
- The Indian government must open doors to investment from bigger sectors so that it can manage the taxation burdens on people from poor economic backgrounds.
- Arranging for more employment, allowing overseas business, allocating funds for SMEs, emphasizing more on agriculture, providing enhanced savings facilities, etc. are some of the key measures that the government must take to improve the GDP.
- The leading banks of India must also curb interest rates and provide basic loans to people to help increase the GDP growth sooner.