(Dewan Salimuddin Ahmed, Unsplash)
- Forecast data from the IMF shows India has risen to become the world’s fifth largest economy.
- India has leapfrogged the GDPs of France and the UK.
- Despite its growth, challenges remain, from sustainability to infrastructure.
India became the world’s fifth largest economy last year, leapfrogging France and the UK, according to GDP data from the IMF’s October World Economic Outlook.
The country’s GDP growth has been among the highest in the world in the past decade – regularly achieving annual growth of between 6-7%.
This rapid rise has been fueled by a number of factors, according to a 2016 McKinsey Global Institute report, including urbanization and technologies that have improved efficiency and productivity.
Real GDP growth is forecast to slow in the year ahead thanks to credit weaknesses.
In 9 years, India has moved from 9th place to 5th place on the ranking of world economies.
Image: World Economic Forum
On the rise
As recently as 2010, India was in 9th place, trailing countries such as Brazil and Italy.
India’s rise is even more dramatic across the past 25 years. Since 1995, the country’s GDP has jumped more than 700%.
India’s GDP growth 1980-2020
Image: IMF
Challenges ahead
Despite its strong economic growth, the country still faces its share of challenges. Access to development and new opportunities has been uneven, says the World Bank, varying by geographic location.
Furthermore, India remains home to one quarter of the world’s poor. Just 39% of its rural residents can access sanitation facilities and nearly half the total population still defecate in the open, according to the UN.
What is the World Economic Forum doing about the skills gap in India?
According to our Future of Jobs 2018 report, more than one-half of India’s workforce will need to be re-skilled by 2022 to meet the demands of the Fourth Industrial Revolution.
With the world’s largest youth population and more than half of the population of working age, skills development is critical for India to sustain inclusive growth and development.
In late 2018, the World Economic Forum, in collaboration with India’s oil and skills development minister as well as the head of business consulting company Infosys, launched a Task Force for Closing the Skills Gap in India.
India – Future of Jobs 2018
Image: Forum’s Future of Jobs 2018 Report
The task force brings together leaders from business, government, civil society and the education and training sectors to help future-proof India’s education and training systems. Find out more about our Closing the Skills Gap 2020 initiative.
Still, significant progress has been made. Poverty reduction rates are among the highest in the world, with more than 160 million fewer people living in extreme poverty in 2000 compared to 2015.
Annual change in poverty rates
Image: World Bank
According to the World Bank, the country is also seeking ways to ensure its future growth is more sustainable and inclusive, adjusting its policies regarding social protections and infrastructure development.
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