While Sri Lanka grows richer, India remains a lower-middle-income nation (2024)
India continues to be a lower-middle-income country along with 46 others, while Sri Lanka has climbed to the upper-middle-income group for the fiscal year 2020, according to the World Bank’s classification of countries by income levels, released on July 1.
Sri Lanka entered the lower-middle-income group in the fiscal year 1999, from the low-income category and continued for over two decades, before moving to the upper-middle-income group this year, the data shows. India became a lower-middle-income nation from low-income in the fiscal year 2009.
The World Bank classifies economies based on gross national income per capita in US dollars, calculated using what is called the Atlas method.
Lower-middle – $1,026 to $3,995, that is Rs 70,137 to Rs 2,73,098
Upper-middle – $3,996 to $12,375, that is Rs 2,73,167 to Rs 8,45,955
High – $12,376 or more, that is Rs 8,46,023 or more.
Of 218 economies, 80 are in the high-income group, 60 in the upper-middle, 47 in the lower-middle and 31 in the low-income group. The classification is updated on the first day of July every year. The gross national income per capita used for this year’s classification is based on 2018 data.
Besides Sri Lanka, in 2019 six other countries – Argentina, Comoros, Georgia, Kosovo, Senegal and Zimbabwe – have seen classification changes based on income levels. Argentina is the only country that slipped from the high-income to upper-middle-income group. The rest moved up.
A country’s gross national income per capita, which can change with economic growth, inflation, exchange rates, and population. Revisions to national accounts methods and data can also influence gross national income per capita.
There is an increase in thresholds from last year due to Special Drawing Rights inflation. The new thresholds, as of July 1 are:
The high-income threshold is also a deciding factor for lending rates since 2018-’19, before which income classifications did not influence lending terms. “Surcharges are applied for lending rates of countries which have been categorized as high income for two consecutive years,” a World Bank release said.
India and BRICS
The Maldives with a gross national income of $9,310 or Rs 6,36,432 and Sri Lanka with a gross national income of $4,060 or Rs 2,77,542, are the only two countries in South Asia in the upper-middle-income group.
India with a gross national income of $2,020 or Rs 1,38,087; Bangladesh with a gross national income of $1,750 or Rs 1,19,630; Bhutan with a gross national income of $3,080 or Rs 2,10,549 and Pakistan with a gross national income of $1,580 or Rs 1,08,009 fall in the lower-middle-income group. Meanwhile, Afghanistan with a gross national income of $550 or Rs 37,598 and Nepal with a gross national income of $960 or Rs 65,626 are among the low-income group economies.
Among fellow developing economies – BRICS – India is the only country in the lower-middle-income group. The others: Brazil at $9,140 or Rs 6,24,810; Russia at $10,230 or Rs 6,99,323; China at $9,470 or Rs 6,47,369 and South Africa at $5,720 or Rs 3,91,019 are in the upper-middle-income group.
This article first appeared on IndiaSpend, a data-driven and public-interest journalism non-profit.
Sri Lanka Will Remain A 'Middle-Income' Country, President's Office Clarifies. Sri Lanka had a GDP of USD 3,815 in 2021, which currently places the country in the 'middle-income' category, according to the World Bank.
The South Asian island of 22 million people is battling its worst economic crisis since independence in 1948, brought about by COVID-19 battering its tourism-reliant economy and slashing remittances from workers overseas, rising oil prices, populist tax cuts and a seven-month ban on the import of chemical fertilizers ...
India continues to be a lower-middle-income country along with 46 others, while Sri Lanka has climbed to the upper-middle-income group for the fiscal year 2020, according to the World Bank's classification of countries by income levels, released on July 1.
For the current 2023 fiscal year, low-income economies are defined as those with a GNI per capita, calculated using the World Bank Atlas method, of $1,085 or less in 2021; lower middle-income economies are those with a GNI per capita between $1,086 and $4,255; upper middle-income economies are those with a GNI per ...
The categories range from 'destitute' (annual household income below Rs 1. 25 lakh or $1,700 in 2020-21) to the 'super-rich' (income over Rs 2 crore or $270,000 in 2020-21). Households with an annual income of Rs 5 lakh-Rs 30 lakh ($6,700-$40,000) form the middle class.
Low Income Group (LIG): LIG households are defined as households having an annual income between Rs.3,00,001 (Rupees Three Lakhs One) up to Rs.6,00,000 (Rupees Six Lakhs).
If the annual income of your family is from Rs.3-6 Lakh p.a., you most likely qualify under the Lower Income Group (LIG) category. But, this income is the total income of the household and not of any individual member.
The lack of education, healthcare, and employment opportunities lowers the income level of the citizens, which results in low per capita income of the country. Q. What is the main reason for a low per capita income in India?
A more recent survey by Indian think tank People Research on India's Consumer Economy (PRICE), which defined a middles-class person as one with an annual income of Rs 5-30 lakh, found this category of Indians to have increased to 31 percent of the population in 2020-21 from 14 percent in 2004-05.
With a GDP of $5 trillion, India can only manage a nominal per capita GDP of around $3,570, keeping the country within the low middle income category in the foreseeable future.
In India, the middle-income group is defined as households with an annual income between INR 7.5 lakh and INR 15 lakh. According to a recent report by the National Statistical Office (NSO), the per capita income in India in 2020-21 was INR 1,27,768.
The literature defining the middle class by using an absolute approach, defines it as those earning some benchmark income range. For example, Bhalla (2021) defines middle class to be those earning more than US$ 3,658 (in 2020 prices) a year or US$ 10 a day in purchasing power parity terms.
The World Bank said Sri Lanka was downgraded as a lower-middle income country after it recorded $ 4,020 per capita income for 2020, in comparison to the $4,060 last year, which resulted in the country being classified in the upper-middle income category in 2019.
Worldwide gross domestic product in 2021 was at about 12,183 USD per capita. GDP in Sri Lanka, on the other hand, reached USD 4,014 per capita, or 88.93 billion USD for the whole country. Sri Lanka is therefore currently ranked 67 of the major economies.
Sri Lanka's international poverty rate measured at $3.20 per person per day (in 2011 PPP terms) for lower middle-income countries declined from 16.9 percent in 2012/13 to 10.8 percent in 2016.
Investing in its agricultural land to give higher productivity, funding and encouraging higher education, giving more access to transport across the country and creating employment opportunities for non-farming jobs are all beneficial for poverty eradication in Sri Lanka.
Sri Lanka is comparatively low at an average elevation of 228 meters above sea level. The highest mountain peak (Pidurutalagala) is at 2,524 meters. In addition to the main island, around 80 other small islands still belong to the country.
One of the biggest geographical differences is that Sri Lanka is Island and India is not. Known as the Pearl of the Indian Ocean, Sri Lanka is just that. As a pearl shimmers in the sunlight, Sri Lanka is an island that outshines India in so many ways.
Sri Lanka scores high on Human development index. India's GDP (PPP) is very high because of the high population that is also relatively young. So, each country has some advantages over the other. The size of Indian economy is really huge, but India has to go a much longer way on HDI..
As per the World Happiness Reports, Sri Lanka was ranked higher than India in 2016, 2017, 2018, 2019, 2020 and 2021, whereas India was ranked higher than Sri Lanka in 2013 and 2015. For the third term, we could not find an established GDP index which compares the Gross Domestic Product between countries.
1 MICs are a very diverse group by region, size, population, and income level, ranging from tiny nations with small populations, such as Belize and the Marshall Islands, to all four of the BRIC giants—Brazil, Russia, India, and China.
The worldwide highest income is earned in Monaco. The smallest budget per capita exists in Afghanistan. In our comparison over 69 countries, the USA comes 7th with an average income of 70,930 USD. The average income is calculated by gross national income and population.
The Adding It Up 2019 project produced estimates for 132 countries classified by the World Bank as being low- or middle-income countries (LMICs) on the basis of their having a 2018 per capita GNI of $US12,375 or less.
The National Statistical Office said the estimated annual per capita (net national income) at current prices for 2022-23 stands at Rs 1,72,000. This marks a growth of around 99 per cent from Rs 86,647 in 2014-15.
Universally, the term refers to the group of middle class households or individuals who have not attained the status of the upper middle class associated with the higher realms of the middle class, hence the name.
Average family of India earns 23,000 rupees per month. Now we look at different groups, Then the lowest income group which is Rs 15,000 per month comprises 46% of the population. Forty per cent of the families population is such that earn between Rs 15,000 to 35,000. We call them the lower middle class.
NEW DELHI – The International Monetary Fund (IMF) in their latest release on the subject reveals that the average income of an Indian (per capita GDP) was $7,333 in 2021 and the country ranked 128th in the world in terms of average standard of living of people.
Increasing price rise: Poor is becoming poorer because of continuous and steep price rise. It has benefited a few people in the society and the persons in lower income group find it difficult to get their minimum needs.
The pollution is a problem. The overall quality of life is also lowered by India's poor performance in the Safety & Security subcategory (56th). Just around three in ten expats (29%) are satisfied with the country's political stability, compared to 64% globally.
Pew Research defines middle-income Americans as those whose annual household incomes are two-thirds to double the national median (adjusted for local cost of living and household size). ... What Is Middle-Class Income?
'Rich India', or the top 20% of households, earning ₹3,94,271 annually. They are also referred to as the 'consumer class' 'Middle India', often conflated with the middle-class, or the middle 60% households, earning ₹151,651 annually. 'Poor India', earning ₹80,529 annually.
Inequality of both income and wealth is exacerbated by one of the lowest female participations in the world which is just above 18% in 2021. According to the World Bank, 2021 overall labour force participation rate for India is as low as 46.3 which is lower than that of Pakistan (50.2%).
The top 10% of the Indian population holds 77% of the total national wealth. 73% of the wealth generated in 2017 went to the richest 1%, while *670 million Indians who comprise the poorest half of the population saw only a 1% increase in their wealth.
Unemployment is also a major reason for the low productivity of labour which can push many into poverty. It is a fact that inequality, poverty and unemployment are related to each other. The lack of sufficient employment not being created in time is the reason why there is an income gap today between classes.
The report has clubbed these groups into seven categories, ranging from the “destitutes” (those with an annual family income of under Rs 1,25,000 or$1,700 in 2020-21) to the “super rich” (annual family income of over Rs 2 crore or $270,000 in 2020-21) with the middle class in between.
13 By this definition, approximately half of India's population of 1.3 billion is now in the middle class. The fastest growth is in the lower middle classes, who spend between US $4 and $6 per day. This group now includes carpenters, street vendors, decorators, and drivers, amongst others.
The World Bank has downgraded Sri Lanka from an upper-middle income country to a lower-middle income one from 1 July. The move comes under the World Bank's 2020-2021 country classification by income level, exactly a year after Sri Lanka was classified as an upper-middle income category.
The majority of Sri Lankans belong to the local middle class, which was 75.2% in 2010 and it has significantly decreased due to the economic crisis and, according to the World Bank it was 48% in 2021.
Spatial inequalities remain a key concern. Urban and rural poverty are estimated to have tripled and doubled, to respectively 15 and 26 percent in 2022, but more than half of population in estate areas still lives below the $3.65 poverty line.
Sri Lanka's economic freedom score is 52.2, making its economy the 136th freest in the 2023 Index. Its score is 1.1 points lower than last year. Sri Lanka is ranked 28th out of 39 countries in the Asia–Pacific region, and its score remains below the world and regional averages.
Swathed in lush rainforest, rice paddies and tea plantations, Sri Lanka is a tropical island gem that captivates visitors with its idyllic beaches, abundant wildlife, verdant hill countries and wealth of ancient Buddhist and Hindu architecture.
Sri Lanka achieved 'Upper Middle Income Country' (UMIC) status in July 2019, as the country's Gross National Income (GNI) increased from USD 3,840 per capita in 2018 to USD 4,060 per capita in 2019. World Bank's (WB) new threshold for UMICs is USD 3,996 – USD 12,375 GNI per capita.
Despite the decline in income poverty, income inequality continues to remain unchanged. More than half the total household income of the country is enjoyed by the richest 20% in Sri Lanka while the bottom decile (poorest 20%) gets only 5%, with the share of household income being just 1.6% for the poorest 10%.
Sri Lanka often referred to as the 'pearl of the Indian ocean', is claimed by both locals and expats alike as a truly great place to live and work. A country of many facets, Sri Lanka offers a spectrum of experiences, cultures and places for those who enjoy diversity and variety.
Introduction: My name is Chrissy Homenick, I am a tender, funny, determined, tender, glorious, fancy, enthusiastic person who loves writing and wants to share my knowledge and understanding with you.
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