India Falls Behind Bangladesh in Per Capita Income by $280

[xizhimen]

India Falls Behind Bangladesh in Per Capita Income by $280​

MAY 23, 2021, 17:21 IST

Once described as a “bottomless basket" by US Secretary of State Henry Kissinger, Bangladesh is fast emerging as a bull economy, outpacing giant neighbour India in many indices of economic or human development.
Bangladesh Planning Minister MA Mannan informed the country’s cabinet last week that the per capita income of Bangladesh has now increased from $2,064 to $2,227.

Bangladesh’s per capita income is now $280 higher than India’s per capita income which is $1,947.


“Our per capita income stands at $2,227 in the fiscal year 2020-21 against the previous fiscal year’s per capita income was $2,064. So, the growth rate is 9 per cent," Bangladesh’s Cabinet Secretary Khandker Anwarul Islam told IANS.

In 2007, the per capita income of Bangladesh was half of that of India but it will overtake the giant neighbor in per capita GDP once again in 2025 if IMF’s latest World Economic Outlook is to be believed.

But what pleases Bangladeshis more is that they have left Pakistan far behind — a sort of sweet revenge for the genocide of 1971 in which three million Bengalis died and quarter of a million women were dishonored by the brutal Pakistan army trying to suppress the Bengali liberation struggle.

“My father Bangabandhu Sheikh Mujibur Rahman took the right decision to break away from Pakistan in 1971. See where they are and where we are today," PM Sheikh Hasina told journalists recently.

Former Bangladesh Information and Telecom Minister Tarana Halim said: “Pakistan is a sinking ship because it developed a military-driven defence budget focused economy with substantial terror financing burden. Once the Awami League took charge in 2009, our leader Hasina focussed on human and economic development with strong trickle-down impacts. We have a stable civilian government and has benefited from good relations with India.

She rubbished some Western analysts who give micro-credit NGOs all credit for the country’s entire development success.

“Micro-credit NGOs don’t invest in health and education, infrastructure and connectivity which are the real drivers of growth. Our government invested heavily in these areas and the country is now reaping the benefits," Halim told IANS.

Halim also said foreign remittances have grown into a strong pillar of Bangladesh with inflow of nearly $3500 million expected in 2021.

“That is possible because our government has streamlined labour exports. We crack down hard on illegal migration because those who illicitly go abroad don’t send back remittance," said Halim, rubbishing charges by Indian Home Minister Amit Shah that Bangladeshis come to India because they don’t have enough food at home.

“We have achieved food security and few hundred thousand Indians work in Bangladesh," she said.

India Falls Behind Bangladesh in Per Capita Income by $280 - News18

The per capita income of Bangladesh has now increased from $2,064 to $2,227.

www.news18.com

 

[Raptor]

Nothing significant.
Even bhutan has greater GDP per capita.
BD economy is dependent on low tech industry
While singnificant % of Indian economy is dependent on high tech industry.

 

[xizhimen]

While Indian economy is dependent on high tech industry.

Really?

Manufacturing Employment Halves In Five Years: CEDA-CMIE

All sub-sectors within manufacturing have registered a longer-term decline in employment, writes Ankur Bhardwaj.

www.bloombergquint.com

Agriculture Now Employs More People Than Five Years Ago
In the two charts below, we look at four sectors. These are agriculture, financial services, non-financial services, and public administrative services. Non-financial services exclude public administrative services and defense services. Together, these accounted for 69% of total employment in 2016-17 and 78% in 2020-21.

The agriculture sector employed 145.6 million people in 2016-17. This increased by 4% to reach 151.8 million in 2020-21. While it constituted 36% of all employment in 2016-17, the figure rose to 40% in 2020-21, underlining the sector’s importance for the Indian economy. Employment in agriculture has been on the rise over the last two years with year-on-year (YoY) growth rates of 1.7% in 2019-20 and 4.1% in 2020-21.

119.7 million Indians were employed in the non-financial services in 2016-17 (excluding those in public administrative services and defense services). This number rose by 6.7% to reach 127.7 million in 2020-21. The financial services sector employed 5.3 million people in 2016-17 and this grew by 9% to 5.8 million in 2020-21.

Public administrative services employed 9.8 million people in 2016-17 but it decreased by 19% to 7.9 million


Manufacturing Employment Nearly Half Of What It Was Five Years Ago
In the next chart, we look at employment in the manufacturing, real estate and construction, and mining sectors. Together these sectors accounted for 30% of all employment in 2016-17 which came down to 21% in 2020-21.

 

[Raptor]

Really?

Manufacturing Employment Halves In Five Years: CEDA-CMIE

All sub-sectors within manufacturing have registered a longer-term decline in employment, writes Ankur Bhardwaj.

www.bloombergquint.com

Agriculture Now Employs More People Than Five Years Ago
In the two charts below, we look at four sectors. These are agriculture, financial services, non-financial services, and public administrative services. Non-financial services exclude public administrative services and defense services. Together, these accounted for 69% of total employment in 2016-17 and 78% in 2020-21.

The agriculture sector employed 145.6 million people in 2016-17. This increased by 4% to reach 151.8 million in 2020-21. While it constituted 36% of all employment in 2016-17, the figure rose to 40% in 2020-21, underlining the sector’s importance for the Indian economy. Employment in agriculture has been on the rise over the last two years with year-on-year (YoY) growth rates of 1.7% in 2019-20 and 4.1% in 2020-21.

119.7 million Indians were employed in the non-financial services in 2016-17 (excluding those in public administrative services and defense services). This number rose by 6.7% to reach 127.7 million in 2020-21. The financial services sector employed 5.3 million people in 2016-17 and this grew by 9% to 5.8 million in 2020-21.

Public administrative services employed 9.8 million people in 2016-17 but it decreased by 19% to 7.9 million


Manufacturing Employment Nearly Half Of What It Was Five Years Ago
In the next chart, we look at employment in the manufacturing, real estate and construction, and mining sectors. Together these sectors accounted for 30% of all employment in 2016-17 which came down to 21% in 2020-21.

Covid 19 effect

 

[Nilgiri]

Issue with BD' GDP per capita (when converted to nominal USD) is significant portion of it is inflation:

World Bank Open Data

Free and open access to global development data

data.worldbank.org

World Bank Open Data

Free and open access to global development data

data.worldbank.org

This reflects in other measures like PPP.

I would be surprised if anyone in this forum (much less the media and their copy-pasters) can explain why that is. It needs some level of actual understanding of macroeconomics.

One small hint is given here:

https://www.newindianexpress.com/business/2021/may/20/bangladesh-beats-india-in-per-capita-income-2304942.html

Former chief economic advisor Arvind Subramanian, had then said that the numbers are not comparable. That’s because “market exchange rates are not appropriate for welfare comparisons across time and countries because they may not adequately reflect domestic inflation and/or productivity growth. More appropriate basis is GDP at constant, purchasing power parity exchange rates. This shows India ahead and despite Covid’s more adverse impact in 2020, it is likely to remain so,” said Subramanian.


The other requires a look into how the USD exchange rate vis a vis BD Taka is determined, and how that differs relative to other developing peers.

If you are reliant on only one type of export and remittance, would the currency's inflation (which is applicable to far more goods and services and their inflation within the country) be tracked suitably?

i.e is the BDT overvalued effectively because of the limited basket of exchange it earns USD with.

Is this part of large sustained reason why BD is unable to attract foreign investment in the quantities commensurate to its purported GDP estimate?

As it is maybe caught in keeping current set of price-sensitive imports as close to their current price as possible as 10-year inflation is already this high?

Such things need deep reform which tend not to happen with little political competition/debate inside.

Further looking at physical consumption and key parameters ....be it total energy, electricity, trade, investment , market cap shows this largely to be the case.

BD has done respectably given what it has inherited, but it needs to do lot more to get to next tiers of economy.