Credit goes to Narsimha Rao, Manmohan: Former CEA Kaushik Basu on India overtaking UK to become fifth largest economy

New Delhi: India overtaking the UK to become the fifth largest economy in the world has triggered a fierce debate among the economists and policy experts with some of them arguing over the pace of the economic growth of the country. India surpassed its former colonial master in December 2021.

Days after it was reported, former Chief Economic Advisor (CEA) Kaushik Basu said that it should have happened by 2020. Basu, who served as the CEA from 2009 to 2012 under then Prime Minister Manmohan Singh, said that 10 years ago "we projected India would overtake UK in terms of GDP by 2020, because of India’s faster growth of population and per capita income".

"This (India overtaking UK) got delayed by 2 years because of the sharp slowdown in India’s per capita income growth since 2016. But I’m glad it’s happened now," he said in a tweet. Basu has also served as the chief economist of World Bank from 2012 to 2016.

In another tweet, Basu praised former Prime Ministers Narasimha Rao and Manmohan Singh for the economic growth that India was witnessing today. He said: "If anyone gets credit for India overtaking UK’s GDP, it’s Narasimha Rao and Manmohan Singh’s govts. India’s growth spurt from 1994 & even faster growth from 2005 made this inevitable, despite the sharp slowdown since 2016. It’s like a relay race won inspite of the last runner."

Basu's this remark evoked a sharp reaction from economist Surjit Bhalla, who is currently the Executive Director for India at the International Monetary Fund (IMF). Responding to Basu, Bhalla said that an equal argument can be made that British colonialism was responsible, because they "gave" India railways and "we economists know that infrastructure is critical for growth".

Meanwhile, a research paper by SBI has predicted that India is set to surpass Germany in 2027 and Japan by 2029 to become the third largest economy in the world. India is currently at the fifth spot trailing behind Germany, Japan, China, and the US.