NEW DELHI: India has technically slipped below Bangladesh in terms of per capita income as the neighbouring country reported its per capita income at $2,227 in the financial year 2020-21— over 9 per cent jump from $2,064 in 2019-20. Latest official data show that India’s per capita income reached $1,947.417, thanks to the sharp contraction in the economic growth due to Covid-19 pandemic and the subseqent nationwide lockdown.
Planning Minister of Bangladesh MA Mannan placed the statistics at a virtual cabinet meeting held with Prime Minister Sheikh Hasina in the chair, reported the national dailies in Bangladesh. “Our per capita income stands at $2,227 in the fiscal year 2020-21, but the previous fiscal year’s per capita income was $2,064. So, the growth rate is 9 per cent,” the Bangladesh cabinet secretary was quoted as saying.
“It’s merely a temporary phenomenon. Bangladesh is more a destinationation of labour intensive exports but that can’t keep on driving the growth engine faster than India’s. Once the pandemic recedes these will crank up growth. I would put it as more of a statistical anomaly and of course India shooting on its feet with some useless policies. But this will come to pass,” an economist working with a foreign financial service firm said on the condition of anonymity.
When the World Economic Outlook data was released by the International Monetary Fund in October last year, it had also projected Bangladesh to surpass India in terms of per capita GDP (at current prices) in dollar terms in 2020. That time, too, it had sparked a row.
Former chief economic advisor Arvind Subramanian, had then said that the numbers are not comparable. That’s because “market exchange rates are not appropriate for welfare comparisons across time and countries because they may not adequately reflect domestic inflation and/or productivity growth. More appropriate basis is GDP at constant, purchasing power parity exchange rates. This shows India ahead and despite Covid’s more adverse impact in 2020, it is likely to remain so,” said Subramanian.