Differences in India and UK Economy: India has been named the fifth largest economy in the world surpassing the United Kingdom or the UK in terms of GDP. In this story, we will be looking at some of the factors that highlight the differences between the Indian and UK economies.
It is a piece of great news that India has surpassed the UK as the fifth largest economy of the world as per the data released by IMF, the size of the Indian economy in nominal cash terms was $854.7 billion while the same for the UK was $816 billion.
How was this value calculated?
This nominal cash value of both economies was arrived at calculating on the basis of adjustment and dollar exchange rates of the relevant quarter under consideration.
Although, India has surpassed the UK to become the 5th largest economy, which it previously achieved in 2019. There are some differentiating factors that need to be considered while analysing the performance of the economies as a whole.
Differentiating Factors of India and UK Economies
Population
If we look at the population of the two countries, we can see that India has a total population of about 1.41 billion people while the UK has a total population of around 68.5 million people.
This shows that India is 20 times more populated than the UK and if this value is taken into the calculation of per capita income which is the next differentiating factor, then we see a change in the data.
GDP Per Capita
GDP Per Capita is arrived at by dividing the GDP of the nation by its population. As mentioned in above, India has a population that is 20 times the population of the UK, the result will be greater difference in GDP per capita of the two countries and is a realistic measure of the prosperity levels of the individual countries overall.
India has a GDP per capita of $2277.4 as per World Bank Data 2021, while the same for UK was $47334.4. This shows that the average income of an individual in India is less than an individual in the UK.
Healthcare Coverage
India is yet to achieve 100 % coverage in the Universal Healthcare system under the Ayushman Bharat Scheme, while in the UK, all the citizens are covered under the NHS or National Health Services free of cost.
The higher population load makes it a daunting task to implement the scheme properly. Also, there is a contrasting contribution of funds due to the number of people that needs to be covered under the scheme.
For example in UK, the government spends 9% of the GDP on healthcare which translates into $140 billion roughly, while in a country like India which spends 2.1 % of its GDP on healthcare which is significantly less than the UK.
Human Development Index
Another significant factor that plays a vital role in the development of the economy as a whole is the Human Development Index, India had an HDI of 0.645 which is medium development while UK had an HDI index of 0.932 which is above the average of 0.720 signifying a better quality of life in UK.
India is a fast-growing economy growing at a rate of 6-7% while the UK economy is currently shrinking and witnessing double-digit inflation which is the highest in 40 years. In such situations, the growth and development of the Indian economy is a great sign.
