India has surpassed the UK to become the fifth-biggest economy of the world in the last three months of 2021, according to calculations made by leading financial news agency Bloomberg based on GDP figures from the International Monetary Fund (IMF).

India is now ranked behind only the US, China, Japan and Germany in terms of GDP after having risen rapidly from the 11th position a decade ago while the UK was ranked 5th.

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The IMF’s own forecasts also depict India overtaking the UK in dollar terms on an annual basis this year.

With India’s GDP growth accelerating to 13.5% in the April-June quarter this year, the lead over the UK is bound to increase this year.

India’s robust economic growth is expected to boost global sentiments as it comes at a time when the US economy– the world’s largest– contracted by 0.6 per cent during the same quarter while China, the second largest, recorded a mere 0.4 per cent growth.

Crude oil prices have skyrocketed following the Russia-Ukraine war, dealing a blow to the global economy. China’s draconian measures to contain Covid has crippled economic activity from time to time at a time when its one-time booming real estate sector has crashed and is causing a severe crisis in the country’s banks as well since loans are not being repaid.

India’s GDP calculated with 2011-12 as the base year stood at Rs 36.85 lakh crore compared to Rs 32.46 lakh crore in the corresponding quarter of 2021-22.

In the April-June quarter of 2019-20, a year that serves as a crucial benchmark as it was before the outbreak of the pandemic—the India’s GDP was Rs 35.67 lakh crore. India has, therefore, not only managed to return to the pre-pandemic level but has grown 3.3 per cent compared to the April-June quarter of 2019-20.

Prime Minister Narendra Modi’s aggressive drive for expanding the coverage of the Covid-19 vaccine across the country helped in containing the spread of the pandemic.

PM Modi’s economic policies which include a big push to large infrastructure projects such as the construction of 25,000 kilometres of highways in the current financial year has played a crucial role in bringing economic growth back on track.

The government’s decision to keep bank credit flowing to the manufacturing sector also helped to spur growth and prevent the loss of jobs. Besides, unlike China, the fight against Covid-19 in India has been carried out in a targeted manner so that overall economic activity was not hit.

Credit growth to agriculture and allied activities improved to 13.2 per cent in July 2022 from 11.1 per cent a year ago, the Reserve Bank of India data shows. Similarly, credit growth to industry accelerated to 10.5 per cent in July 2022 from 0.4 per cent in July 2021.

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