GDP and viksit bharat

BLOG 32/2025 DATED 30TH NOVEMBER 2025

Gross Domestic Product is a much talked about economic parameter. Let us understand what is GDP and how India has performed over the years in terms of GDP. To put it simply, GDP represents the sum total of entire economic activity in the country. In other words, it is the total income of the country. GDP represents the level of economic activity in the country however it does not indicate that the activity is actually resulting in people’s well-being or not. For example, if there is general price increase, GDP will go up even without any increase in economic activity. Amount spent by people on the treatment of various deceases also increases GDP. Hence increase in GDP is an indication of enhanced economic activity however it does not reflect the economic well-being of the citizens or nation as a whole.

Per Capita Gross Domestic Product is relatively more realistic measure of economic strength of the country. Per Capita GDP is arrived at by Dividing the GDP by the population. It shows how much average economic value is applied to an individual or in simple terms how much a person is earning. However, this method also does not consider the economic disparity in the country as many persons may be earning much lesser than the Per Capita GDP.

As per the latest available data India enjoys 4^th rank in the world (USD 4.19 tn) as far as GDP is concerned. The countries above us are US, China & Germany. Japan & UK are at 5^th and 6^th rank. India’s GDP is consistently growing at above 5% for the last 25 years which is the best among the major economies. India’s GDP growth in the last 25 years is as under:

Year	Growth in GDP	5 year average
2000	3.8	5.64
2001	4.8
2002	3.8
2003	7.9
2004	7.9
2005	7.9	6.94
2006	8.1
2007	7.7
2008	3.1
2009	7.9
2010	8.5	6.6
2011	5.2
2012	5.5
2013	6.4
2014	7.4
2015	8.0	6.7
2016	8.3
2017	6.8
2018	6.5
2019	3.9
2020	-5.8	5.44
2021	9.7
2022	7.6
2023	9.2
2024	6.5

Source: Organisation for Economic Development (OECD), World Bank.

Here we can observe that highest GDP growth has been acheived in 2021 i.e 9.70% and lowest in 2020 i.e -5.8%. Considering the 5 years block, we observe that best 5 years were 2005 to 2009 where average GDP growth was 6.94% and the 2019 to 2024 block has shown the lowest 5 years average of 5.44% growth. However, this low average is due to negative growth in 2020 which was a covid affected year. Another low growth years were 2008 & 2019. While 2008 was the year of sub-prime crisis, 2019 was also the year of covid. Despite those hick-ups, 5 years average is highest at 6.94% and lowest at 5.44% which is very handsome considering all major economies.

Though India has shown handsome GDP position, the real issue lies in Per capita GDP which is dismal at $ 2934 while the other comparable economies are at $ 89105 (US), $ 13657 (China), $ 55911 (Germany), $ 33955 (Japan) and $ 54949 (UK). India’s per capita GDP is in the category of Bangladesh, Bhutan, Congo, Angola etc representing one of the poorest nations.

Even as per purchasing power parity (PPP) per capita GDP where the prices of different countries are equated, India’s GDP is just $ 11158 which is much lower than the major economies $ 85810 (US), $ 27105 (China), $ 72300 (Germany), $ 51685 (Japan) and $ 60620 (UK). Here also we match with the undeveloped nations. Over and above there is a considerable disparity in income that leaves an average of much lower than what is shown here.

Conclusion:

We must rejoice on the consistent growth rate of GDP in our country and our 4^th rank, however we must not be convinced with what we have achieved. We must emphasise on the low per capita GDP and take necessary steps to increase it at least to the respectable levels. That will ensure the day light to the dream of DEVELOPED INDIA, THE VIKSIT BHARAT.