I see several reasons behind the increase in per capita GDP of Bangladesh more than India. These are the continuity of GDP growth, political stability and less impact of Covid-19 pandemic.
At one time, India's GDP growth rocketed over 8%, but it came down to 4% later. It means, there was no continuity in their growth.
But Bangladesh has successfully maintained its growth momentum. It increased from six to seven percent maintaining a continuous rhythm, and from there to eight percent. The IMF's assessment is the result of this continuity.
India is a country with huge potential and a big economy. Compared to that, Bangladesh's amount of resources is much less. They have a skilled workforce, but Bangladesh has nothing to mention except unskilled labour.
Bangladesh's population growth rate is less than India. It played an important role in the calculation of per capita GDP. Although we will not remain above India for long. In fact, this progress in index will have a positive effect on our psyche.
Internal migration in Bangladesh is less than that of India. For example, few people from Rangpur go to Barisal to earn livelihood. But in India, workers from one province go to work in another province. In other words, their internal migration is much higher than Bangladesh.
As an impact of the corona pandemic, this internal migration in India has stumbled, affecting the income of the workers. India's GDP declined as a result of the decline in workers' income. But nothing like that has happened in Bangladesh. That is why the rate of income reduction due to internal migration is lower here (in Bangladesh) than in India.
Moreover, corona could not affect our agricultural output. It caused little problems in achieving targets in agriculture. In India, on the other hand, the agriculture sector suffered due to drought and heavy rains. This has also affected the GDP.
Apart from this, the Modi government's efforts to free the Indian economy from black money have had a long-term negative impact on the country's GDP. The country is yet to come out of that impact. Moreover, state-based political instability is a regular phenomenon in India, but Bangladesh is free from all these.
However, although our per capita GDP is increasing, inequality is also increasing side by side. The poor are getting poorer. In this case, the government is trying to increase the coverage of social security programmes. Along with this initiative, we need to focus on reducing corruption and enhancing good governance to reduce inequality.
Dr Zaid Bakht is an economist and chairman of Agrani Bank