India, which can be described as Britain’s post-colonial underdog just overtook UK’s economy for the first time in the last hundred years (or more), becoming world’s 6th largest economy by Gross Domestic Product, after the US, China, Japan, Germany and France.
Today’s historic milestone is basically a symbol of India’s impressive economic growth from the last 10 years and, who knows, maybe the so called post Brexit slump played a role in the downgrade of UK’s economical position on the world stage.
2016 was an excellent year for India by any metrics, as in February it managed to surpass China in terms of world’s fastest growing economy. In October, the International Monetary Fund (IMF) said that India will continue to be world’s fastest growing economy for the foreseeable future, predicting that its GDP will increase by 7.6% next year, in 2017.
India’s Minister of State for Home Affairs Kiren Rijiju said that despite having a huge population, today’s news makes for a big leap forward and something to be proud of. The UK, which is India’s former colonial ruler is projected to increase its GDP by only 1.8% during the current year and 1.1% in 2017.
After the June Brexit vote, Britain’s currency and economy have struggled, despite the fact that the country is still in the EU and basically nothing changed just yet.
The price slump in the global commodities markets benefited India enormously, as the country relies heavily on its manufacture industry, just like China does. Also, the lower than expected inflation figures and the large trade gains boosted the country’s economy.
Since his 2014 election,India’s Prime Minister Narendra Modi managed to change the country via implementing a new package of market reforms, which helped with economic growth.
However, many of the reforms were incredibly complicated, the latest example being the recent currency reform. Modi is trying to eradicate tax dodging and corruption via a drastic measure announced back in November, i.e. by taking out of circulation all high denomination currency rupee notes.
This Draconian move was taken because India, which is world’s second most populous country, has only 2-3 percent of its citizens paying income tax, as they can hide their earnings with cash/black money.