In India these days, the celebrations are one after another, and the country is in a state of“Mystique”.
On May 23rd, after celebrating the historic victory of Operation Cinnabar, India broke the news on May 25th that it had surpassed Japan to become the world’s fourth largest economy, and will surpass Germany in two and a half to three years, among the world’s top three.
The “Good news,” Subramaniyam, CEO of the Indian Institute of Transition Studies, a government think-tank, told a news conference. The move follows the 10th council meeting of the think-tank, chaired by Molde FK, the Indian Prime Minister. “We have a $4 trillion economy,” Subramaniyam said at the press conference, “And that’s not my number, that’s the IMF number.” So, of course, it’s true!
As soon as the news was announced, the whole of India exploded, and the country was in a jubilant mood, as if it had already stood in the center of the World Economic Stage. Media coverage of India’s economic success has led to spontaneous celebrations on the streets of major cities. The whole atmosphere is more lively than the“Victory”.
Speaking of which, I’m sure you’re all wondering, when did India become the fourth largest economy in the world in terms of GDP?
A check of the information, it turns out that there is indeed a source, indeed from the International Monetary Fund.
However, the IMF’s World Economic Outlook, released in April, said India’s nominal GDP is expected to reach $4.187 trillion in 2025, while Japan’s is expected to reach $4.186 trillion, india will overtake Japan as the world’s fourth-largest economy.
Turns out, this is just a“Forecast”, 2025 is not even half of it. But what does it matter? Can’t we just celebrate first? India can be said to have won the war if it has lost, and the whole country is celebrating for 10 days, not to mention that this“Predicted” event will come true sooner or later.
If not now, when?
On May 7th, India launched Operation Cinnabar against Pakistan. Three Rafale, a su-30, a mig-29 and a heron drone were killed, lose enough to go down in the history of World Air War and make a page.
As a result, India declared a resounding victory, with a 10-day“Tricolor parade” of celebratory events, funerals and national celebrations.
On May 21st, the Indian government announced that it would send seven cross-party delegations to 32 countries and the European Union headquarters to preach India’s“Victory”. Japan, South Korea and other countries could only hold their noses.
This is the world’s fourth largest GDP ranking countries, full of confidence, no one!
But even if India does rank fourth in the world in terms of GDP, that“Fourth” is still a lot of water under the bridge.
First, the decline in Japan’s GDP is not a real decline, but a decline in the value of Japan’s GDP against the dollar, leading to a reduction in the translation of Japan’s GDP. This is the core reason why Japan is expected to fall out of the top four.
Second, India’s GDP growth is not necessarily rising, but is being heavily watered down.
As early as 2015, India carried out a major reform of the GDP accounting method. The reform includes the inclusion of more economic activities, the adjustment of the calculation base year and the adoption of the market price method. It was like a statistical“Magic trick” that instantly raised the GDP figure. It is well known, for example, that cow dung in India is also included in GDP, which makes a lot of economic activity overvalued and is the secret to India’s“Getting rich”.
In addition, the relative backwardness of India’s economic data collection system, particularly in the vast rural areas and the informal sector, has led to distortions in the basis of GDP accounting and raised questions about the accuracy of its data. It can also cause data to be artificially inflated.
Of course, we do not deny that the Indian economy has some advantages. India does have bright spots in demographic dividends, software and IT services, pharmaceuticals, and cultural soft power, but that does not obscure the many problems that actually exist in the Indian economy.
In 2023, the Indian population has surpassed that of the Chinese to become the world’s largest. Moreover, the average age of India’s population is only 28, a full decade younger than China’s. However, Indians have a fatal flaw: too little education. Under the influence of the caste system, only high caste people can receive education. India’s adult literacy rate is only about 74 percent, according to the World Bank.
There are also obvious structural weaknesses in the Indian economy. Despite the rapid development of the service and IT sectors, the industrial base is weak and the manufacturing sector lags behind. India’s overall level of industry is low, with manufacturing accounting for only 14.2 per cent of GDP and much of output dependent on construction and mining.
More embarrassingly, India’s manufacturing sector is still heavily dependent on imported components, and“Made in India” is more of an“OEM”. Good infrastructure is needed to develop manufacturing. But India does not yet have a self-developed high-speed rail line, which travels mainly on motorcycles and green-skinned trains full of people. At the same time, India’s old power facilities, power generation is far from the needs of large-scale industrial production, which has brought serious obstacles to the development of manufacturing.
In India, high-caste Brahmins control most of the media and educational resources. They preach“India beats China and Pakistan” on television every day. The lower classes are uneducated and have no access to real information, so they follow the letter. Like this one, the Indian government declared a resounding victory, and most Indians believed it. As for the social media x accounts that revealed the truth, India asked Musk to block 8,000.
So why are Indians so confident? Some people say there are complicated reasons behind this. At least historically, the British colonized India for 190 years, leaving Indians with severe“Post-traumatic stress disorder.”. Therefore, Indians want to be first in everything. For example, the Indus Party developed a large number of people to join the party, and transformed itself into the world’s largest party. India tried its best to build the world’s tallest flagpole and the world’s tallest statue, to boast that GDP is bigger than Germany is to cover up the humiliation of being a colony.
Of course, the Molde FK Administration’s recent high profile has also involved political considerations such as boosting the ruling party’s popularity, strengthening its position and diverting public attention from domestic issues.
Still, a word of advice to India: Can We wait to celebrate until we have achieved our goal? It would be a shame to celebrate in advance and not achieve your goals.
Images from the network