by Ishika Jaiswal & Dr. Bimal Jaiswal
India and Bangladesh are the two exceptional economies in South Asian region. Both the nations have number of similarities and both want to achieve remarkable economic growth in the shortest span of time possible. To attain this objective, both the economies are endeavouring altogether in certain sectors and sub-sectors. However, there are some avenues where India and Bangladesh are competing with each other to win the race of achieving higher growth.
As far as current scenario is concerned, it can be vividly noticed that India is rapidly growing and leading the region. India has a massive industrial sector, a technologically advanced agricultural sector, and the outstandingly performing services sector which is the biggest contributor in country’s GDP over and above all. But the growth trajectory of Bangladesh is utterly noticeable as country’s unrivalled growth rate can’t be misconstrued. In a shorter span of time, Bangladesh has marked its presence on the globe and clobbered India in certain respects.
In line with the data released by the World Bank, convergence in the GDP per capita annual growth rate of India and that of Bangladesh can be witnessed in last decade and the latter outstripped the former in 2018. Bangladesh recorded an annual growth rate of 6.19% for GDP per capita in the year 2018 and managed to sustain it positive during the entire Covid-19 pandemic period as 6.78% in 2019and 2.42% in 2020. However, India experienced an annual growth rate of 5.35% for GDP per capita in 2018 which fell to 2.69% in 2019 and recorded negative as -7.52% in 2020. Further, the inflation rate (measured through GDP deflator) in India was higher than that in Bangladesh post-pandemic. Moreover, both the countries are paralleling at age dependency ratio and the working-age population (15-64 years of age-group) increased by 6.25% in Bangladesh while by 4.68% in India during 2011-2021 while the total population has increased by just 1% more in Bangladesh than that in India. In addition, the Gross Fixed Capital Formation has increased by nearly 15% of GDP in Bangladesh while it has come down by around 18% in India during 2011-2021.
Bangladesh has also surpassed India in certain social dimensions. According to World Economic Forum’s Global Gender Gap Report 2021, Bangladesh has improved its ranking from 91th place in 2006 to 65th place in 2021 while India has slipped down from 98th place in 2006 to 140th place in 2021 among the 156 countries. Female literacy increased by about 31% in Bangladesh while by only about 12% in India during 2011-2020. The female life expectancy and infant mortality rate (per thousand live births) in Bangladesh are 75 years and 24 respectively while that in India are 71 years and 27 respectively in 2020. Further, Bangladesh is ranked at 96th position while India at 136th position in UN’s World Happiness Index 2022.
In addition, India has an unemployment rate of 6% while Bangladesh has that of 5.2% in 2021. It has been reached to 8% in 2020 as an impact to pandemic on India while Bangladesh was able to sustain at 5.4% in 2020. This is clear that India is currently experiencing higher unemployment along with a bulge in its working-age population which will surely be an impediment in realizing the maximum possible benefit of its present demographic transition phase. However, Bangladesh has enough time to align its growth with its increasing working-age population as it is getting preference for setting up manufacturing units from all over the world.
Although other dimensions also play significant role in determining economic growth of a nation, yet the aforementioned ones are considerable acclamation for Bangladesh. Bangladesh may not be currently in a position to comprehensively outperform one of the biggest Asian economies – the Indian Economy – but gaining recognition as a future manufacturing hub at the global level, it will definitely create stiff competition for India.
About the Writers:
Ms. Ishika Jaiswal is a Senior Research Fellow in Department of Applied Economics University of Lucknow, Lucknow. She is currently pursuing her doctorate in the area of Demographic and Population Studies. She has authored a book on Indian Economy and published research papers in UGC Care Listed journals. She has attended various conferences and doctoral colloquiums at reputed institutions like IISc Banglore, IBS Hyderabad and alike.
Dr. Bimal Jaiswal is a Professor in Department of Applied Economics University of Lucknow, Lucknow. He has authored few books in areas of Banking and Finance. He has a teaching and research experience of over 20 years. He has contributed papers in several journals and attended various national and international conferences. He is also an active national-level member of Commerce, Accounting and Management Associations.