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Bangladesh beats India on per capita income in FY21

  In a stunning development, India falls behind Bangladesh on per capita income in the financial year 2020-2021. Even amid pandemic, Bangladesh has emerged as an optimistic economy and crossed the towering neighbour country.

Per capita income is a growth index of a nation. It is measured as the average income earned per person in a geographical region and obtained by dividing a country's national income by its population. Bangladesh’s per capita income stands at $2,227 in fiscal year 2020-2021 if compared to the previous years’ $2064. Bangladesh’s growth rate increased by 9 percent, whereas India’s per capita income shrank to $1947 due to pandemic and subsequent nationwide lockdown.

Technically, an average Bangladeshi’s income is $280 higher than that of an average Indian in the present scenario. Incidentally, in 2007, the per capita income of Bangladesh was half of that of India. Bangladesh now surpassed the per-capita income of India in terms of dollars within a gap of fourteen years.

The International Monetary Fund (IMF) has released the World Economic Outlook in October 2020. The report forecasted that Bangladesh would outshine India in terms of per capita dollar terms in 2020. The news stirred up a significant length of controversy then.

India’s then-chief economic advisor, Arvind Subramanian strongly contradicted saying, “Market exchange rates are not applicable for welfare comparisons across the time and countries. They don’t seem to reflect domestic inflation and productivity growth. A more reasonable basis is GDP at constant, purchasing power parity exchange rates.” He further added that India is ahead of Bangladesh. Despite Covid’s more adverse impact in 2020, it is likely to remain so”. In reality, though, his opinion didn’t seem to satisfy the actual situation.

On the other hand, financial experts believe that Bangladesh’s superiority over India regarding per capita income will not sustain for long. The prediction is that India will soon recover its position after the lockdown lifts up.

According to an economist working with a foreign financial service firm, said on the condition of anonymity, “It’s merely a temporary phenomenon. Bangladesh is more of a destination nation of labour-intensive exports which can’t keep on pulling the growth engine faster than India”.

Since inception, Bangladesh has been fighting hard with its several socio-economic issues. Still, with proper policies and the government’s several development programs, the country elevated its development momentum with excellent speed. Its blooming economy already succeeded its neighbouring countries, Pakistan, Nepal, Bhutan, Myanmar and India.

The United Nations has recommended the graduation of Bangladesh from the category of ‘Least Developing Country (LDC)’ to Developing Nations.

What makes Bangladeshis proud today is that they have left Pakistan far behind—a sort of sweet revenge for the genocide of 1971 where three million of Bengalis died. A quarter of a million women were tortured and dishonoured by the brutal Pakistan army trying to stamp out the Bengali liberation struggle.

Bangladesh’s PM, Sheikh Hasina has also acknowledged Bangladeshi’s feelings and informed to the journalists in a recent interview that her father, Bangabandhu Sheikh Mujibur Rahman took the right decision to break away from Pakistan in 1971. Pakistan’s per capita income as per the last record is $1186, which is far lower than that of Bangladesh.
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