The recent projection of the International Monetary Fund (IMF) that Bangladesh will overtake India in per capita GDP for 2020 has led to massive criticism in India.
Indian National Congress party leader Rahul Gandhi also took a hand on the BJP led government after the projection news was published.
However, this is not the first time Bangladesh will overtake India. Bangladesh had a higher dollar per capita GDP for three years running — 1991, 1992, and 1993, report Times of India.
The reason then was a sharp decline in India's per capita GDP in the dollars was the devaluation of the rupee starting July 1991. In 1990, the dollar averaged Rs 17.5; for 1991, it was up to Rs 22.7, and by 1993 had risen to Rs 33.4. As a result, India's per capita GDP fell from $374 in 1990 to $306 in 1993 despite rising rupee terms. Bangladesh's per capita GDP, in the meantime, had remained almost static at $324 in 1990 and $322 in 1993.
Since then, however, India's per capita GDP has consistently been higher and just a decade ago was more than 80% higher — $1,384 compared to $763 in 2010. Over the last decade, that gap has been rapidly closed and in 2019, India's per capita GDP of $2,098 was only 16% higher than Bangladesh's $1,816. In 2020, the IMF estimates that India's number will shrink by 10.5% due to the effect of the shutdown of the economy in the aftermath of Covid-19 while Bangladesh's will rise by about 4%, enough for it to just inch ahead.
Beyond the India-Bangladesh comparisons, these 30 years have seen dramatic changes in the pecking order in Bangladesh when it comes to per capita GDP in dollar terms.
In 1990, China had a lower figure than India, though not by much, while Pakistan's per capita GDP at $495 was about 33% higher than India's $374. Today, China's $10,838 as estimated by the IMF is nearly six times India's $1,877. The IMF has no estimate for Pakistan for 2020, but its 2019 number was 36% lower than India's.
Sri Lanka and Bhutan continue to have much higher per capita GDP than India while Nepal and Myanmar have lower figures. Myanmar, however, has been rapidly catching up. In 1998, the earliest year during these three decades for which the IMF has an estimate for Myanmar, the country's per capita GDP was barely 28% of India's. In 2020, its number would be 71% the Indian level.
Bangladesh creeping ahead of India may not be a flash in the pan, if the IMF forecasts prove right. By those estimates, it will have lower per capita GDP between 2021 and 2023, but will equal India's in 2024 and edge a little ahead in 2025.