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Bangladesh overtakes India in per capita GDP: IMF

Indian revenues are about $750 billion but spends about $970 billion. If we follow Bangladesh India can spend upto $1.8 trillion
Show me how India collect 750 billion dollar revenue? You have a habit of just adding central govt. collected revenue with all the states revenue figure shown in the state budget. When in reality, a big chunk of the state revenue actually received from the central govt.'s devolution of resources. Do you know, Indian central govt. gives 41% of it's total revenue to the states? For majority of Indian states barring a few like Maharashtra, Tamil nadu, Karnataka, this central tax devolution form the backbone of the state budget. So to avoid double counting, you have to subtract the central transfer and only count the tax revenue which states raise on it's own.

Indian central budget spending for this year is 428 billion dollar. Revenue collection around 330 billion dollar. All the states on their own collect another 300 billion. Here in Wikipedia data obtained from IMF put Indian total tax revenue at $ 631 billion and spending $808 billion for 2020. For Bangladesh, corresponding figure are $44 billion and $61 billion for 2019.
If we follow Bangladesh India can spend upto $1.8 trillion. Then Indian GDP would just be way higher.
How can you spend 1.8 trillion dollar when your entire GDP is 2.8 trillion dollar? Bangladesh's 61 billion dollar spending is still less then 20 percent of GDP. You can not just double from the higher base. Indian spending is already around 30 percent of GDP. Normal for a developing country.
 
Show me how India collect 750 billion dollar revenue? You have a habit of just adding central govt. collected revenue with all the states revenue figure shown in the state budget. When in reality, a big chunk of the state revenue actually received from the central govt.'s devolution of resources. Do you know, Indian central govt. gives 41% of it's total revenue to the states? For majority of Indian states barring a few like Maharashtra, Tamil nadu, Karnataka, this central tax devolution form the backbone of the state budget. So to avoid double counting, you have to subtract the central transfer and only count the tax revenue which states raise on it's own.

Indian central budget spending for this year is 428 billion dollar. Revenue collection around 330 billion dollar. All the states on their own collect another 300 billion. Here in Wikipedia data obtained from IMF put Indian total tax revenue at $ 631 billion and spending $808 billion for 2020. For Bangladesh, corresponding figure are $44 billion and $61 billion for 2019.

How can you spend 1.8 trillion dollar when your entire GDP is 2.8 trillion dollar? Bangladesh's 61 billion dollar spending is still less then 20 percent of GDP. You can not just double from the higher base. Indian spending is already around 30 percent of GDP. Normal for a developing country.
Sure that sounds about right. India does transfer about $130 billion to states. But Indian budgets are realistic. India more or less collects the revenues posted in their budgets.

But Bangladesh always overestimates their revenue.

The original target for NBR was Tk 3.25 trillion for fiscal year (FY) 2019-20.

It was reported that the NBR collected Tk 2.15 trillion in tax revenue facing a 3.79 per cent negative growth in the FY 2019-2020 compared to that of the previous FY 2018-19.

Thats a stupendous overestimation. So when they say $44 billion as revenues, take it with a pinch of salt. It is actually $26 billion.
 
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Sure that sounds about right. India does transfer about $170 billion to states. But Indian budgets are realistic. India more or less collects the revenues posted in their budgets.

But Bangladesh always overestimates their revenue.

The original target for NBR was Tk 3.25 trillion for fiscal year (FY) 2019-20.

It was reported that the NBR collected Tk 2.15 trillion in tax revenue facing a 3.79 per cent negative growth in the FY 2019-30 compared to that of the previous FY 2018-19.

Thats a stupendous overestimation. So when they say $44 billion as revenues, take it with a pinch of salt. It is actually $26 billion.
That 3.79 percent negative growth is due to COVID-19 lockdown during the last quarter of the fiscal year. India also had revenue shortfall of 4 lakh crore Rupees.

Taka 2.15 trillion is just NBR revenue, tax is also collected from Non NBR sources plus there are also non tax revenue. All of these add up as the total revenue. This is the break down of source of money for the last years budget 2019-2020. Budget spending was trimmed by Taka 200 billion and shortfall of revenue were met by additional loan. So giving example of 2019-2020 is not entirely correct as last fiscal year year(July-June) is not normal due to Corona.
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That 3.79 percent negative growth is due to COVID-19 lockdown during the last quarter of the fiscal year. India also had revenue shortfall of 4 lakh crore Rupees.

Taka 2.15 trillion is just NBR revenue, tax is also collected from Non NBR sources plus there are also non tax revenue. All of these add up as the total revenue. This is the break down of source of money for the last years budget 2019-2020. Budget spending was trimmed by Taka 200 billion and shortfall of revenue were met by additional loan. So giving example of 2019-2020 is not entirely correct as last fiscal year year(July-June) is not normal due to Corona.
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I was talking about NBR tax targets. Non-NBR tax revenue is separate issue and they are minimal. How far back do you want to go to prove you the overestimation?

The tax authority collected Tk 2.23 trillion in 2018-19, preceded by Tk 2.02 trillion in 2017-18, Tk1.71 trillion in 2016-17 and Tk 1.53 trillion in 2015-16, according to the research wing data of the NBR.

So you can see from above. Average growth in the recent years has been just 10-15%.

So after 2018-19 collection of 2.23 trillion, the estimations should have been 2.5 trillion for 2019-20 and not 3.3 trillion. I mean where is the logic? Do you expect taxes to grow 30% in one year?

This has been done to show a fattened budget. Now lets see 2018-19 estimation.

The National Board of Revenue (NBR) is likely to get a gigantic target to collect Tk 291,000 crore in revenue during the coming 2018-19 fiscal year.

After achieving just 2.02 trillion in 2017-18, they estimated next year tax collection to grow to 2.91 trillion. Seriously 30% growth?

Now you again set a target of 3.25 trillion for 2020-21 after collecting 2.15 trillion? about 40% raise in taxes during pandemic year, really?

So you can see this has been a trend. They still haven't achieved 2016-17 target.
 
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I was talking about NBR tax targets. Non-NBR tax revenue is separate issue. How far back do you want to go?

Lets see the 2018-19 tax target and collection, shall we?

The tax authority collected Tk 2.23 trillion in 2018-19, preceded by Tk 2.02 trillion in 2017-18, Tk1.71 trillion in 2016-17 and Tk 1.53 trillion in 2015-16, according to the research wing data of the NBR.

So you can see from above. Average growth in the recent years has been just 10-15%. So after 2018-19, the estimations should have been 2.4 trillion for 2019-20 and not 3.3 trillion. I mean where is the logic?

The National Board of Revenue (NBR) is likely to get a gigantic target to collect Tk 291,000 crore in revenue during the coming 2018-19 fiscal year.

So in 2018-19, you achieved 2.23 trillion out of 2.91 trillion target.

Then in 2019-20, you proceed to set a target of 3.3 trillion (33% more than actual receipts) and ended up 2.15 trillion.

Now you again set a target of 3.25 trillion? about 40% raise in taxes during this year, really?


It's honestly stupid when you compare India which is a larger nation with Bangaldesh which is a smaller nation.

Bangladesh should aim to be like South Korea and not try to beat Indian standards cause Indian standards are pretty low.

Beating Indian standards isn't impressive , if Bangladesh can develop its human rights index and its GDP per capita along with free education and healthcare then it will beat India in a certain sector.

Then comes to innovation / inventions and manufacturing etc

It will be a bit more easier to develop Bangaldesh compared to extremely diverse India.

But let's be honest , all Bangladesh needs is a good leader that ain't no body's slave
 
It's honestly stupid when you compare India which is a larger nation with Bangaldesh which is a smaller nation.

Bangladesh should aim to be like South Korea and not try to beat Indian standards cause Indian standards are pretty low.

Beating Indian standards isn't impressive , if Bangladesh can develop its human rights index and its GDP per capita along with free education and healthcare then it will beat India in a certain sector.

Then comes to innovation / inventions and manufacturing etc

It will be a bit more easier to develop Bangaldesh compared to extremely diverse India.

But let's be honest , all Bangladesh needs is a good leader that ain't no body's slave

Yes, Indian government revenues are pretty poor. Lets all hail new South Korea in the region. Congrats.
 
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This is the story referred to - in the commentary from 'The Print' above.


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With better development indicators, spectre of a Bangladeshi cross-over to India is ill-founded

In the last decade, on a range of social development indicators, Bangladesh has fared better than India. Even on the cricket pitch, Bangladesh beat India at the junior world cup. So why would Bangladeshis en masse want to leave their cherished homeland?
Written by Swati Narayan | Updated: February 14, 2020 11:07:30 am

In an age of dog-whistle scaremongering, a Union minister alleged on February 9 that, “half of Bangladesh will come to India if citizenship is offered.” But no crystal ball prediction could be more deluded. This year Bangladesh’s economic growth rate has surpassed India. In the last decade, on a range of social development indicators, from infant mortality to immunisation, Bangladesh has fared better. Even on the cricket pitch, Bangladesh beat India at the junior world cup. So why would Bangladeshis en masse want to leave their cherished homeland?

Undoubtedly, since economic liberalisation, Indians have grown much richer than Bangladeshis, but in terms of quality of life our neighbour largely outshines us. India trails across several (not all) composite indices from the latest Global Hunger Index to the Gender Development Index. Even on the 2019 World Happiness Index, Bangladeshis score better. While, technically, on the Human Development Index, Bangladesh scores marginally less, this is largely because the index merges income and non-income parameters.

My recent doctoral thesis sought to decode precisely this South Asian puzzle. How have India’s poorer neighbours forged ahead in social development? In the case of Bangladesh, the most prominent factor has been the country’s ability to dissolve inequalities through sustained investment in public services and the bridging of social and gender distances.

First, healthcare. Till the Eighties, Indians lived longer than most South Asians. But now, despite being poorer, an average Bangladeshi female child at birth can expect to live for four years more. Fewer Bangladeshi children also die before their fifth birthday. The formula for this success has been relatively simple. Since 2009, the government has constructed well-stocked “community clinics” in every third village. In addition, for four decades, committed cadres of government health workers have delivered medicines and family planning to women in the comfort of their homes.


Second, on the education front, even though India has a demographic dividend, Bangladesh has achieved a marginal advantage in youth literacy. Further, across income quintiles, Bangladeshi girls have higher educational attainments than boys. Most importantly, my doctoral survey in Panchagarh district found that Bangladeshi children had better reading skills than the Indian average as assessed by Pratham. Across 44 Bangladeshi schools, there were lower levels of teacher absenteeism. Further, the government provides free textbooks in the government, non-government (NGO) and madrassa-run schools promptly at the start of the academic year, without the chronic delays which plague India.

Economist Jean Drèze has aptly described India as amongst the world champions in social underspending. In contrast, Bangladesh despite being a poorer neighbour since the Nineties, has spent a greater proportion of government expenditure on education and healthcare. The fruits of these sustained investments have reaped rich dividends.

Third, on the nutrition front too, Bangladesh fares better. Thirtythree per cent of Bangladeshi children are underweight compared to India’s 36 per cent as per the demographic health surveys. Similarly, a greater proportion of Indian children are also stunted. Further, the inequality between wealth quintiles is more stark in India. A few years ago, the Bangladeshi government, with the help of NGOs, hired a unique cadre of “Pushti Apas” (nutrition sisters) who went door-to-door in their social endeavours. Unlike the Indian Poshan Abhiyan’s focus on vegetarian foods, they did not shy away from teaching mothers to feed growing infants a balanced diet with mashed fish, meat and eggs.

Editorial | It may be diplomatically imprudent to alienate Bangladesh with CAA premise

Fourth, even at the turn of the millennium, at least 80 per cent of Bangladeshi homes had toilets, even if rudimentary. By 2016, 96 per cent of households and 80 per cent of schools in my doctoral survey had proper sanitation. Apart from the typical Islamic emphasis on hygiene, local governments not only provide cement rings for free to poor families, but they also regularly spread messages through community group discussions, mosques, mass media and schools. Local entrepreneurs have also ensured that with the innovation of plastic pans, the cheapest toilets cost less than Chinese mobile phones.

That apart, Bangladeshi women are also increasingly assertive. The 2006 World Bank Survey on Gender Norms found a growing trend of “educational hypogamy”. In sharp contrast to India’s decline, Bangladeshi women also have higher labour force participation. Apart from the urban readymade garment sector, thousands of rural women work in agro-processing tea factories, jute mills, poultry and dairy industries. Every morning, streams of women in saris can be seen walking towards these factories with characteristic steel lunch dabbas in their arms.

In comparison, India is grappling with the worst unemployment levels in 45 years and sinking economic growth rates. Government ministers should pull up their own socks, instead. Berating our neighbours with the false bogey of illegal immigrants, in light of the Citizenship Amendment Act, is nothing but an unjustifiable Islamophobic distraction. Instead, it would be far wiser for the Indian government to humbly learn the recipe of South Asian success to improve the lives of citizens from the impressive “Shonar Bangla”.

This article first appeared in the print edition on February 14, 2020 under the title ‘Bangladesh fares better’. The writer is a visiting fellow at the Institute for Human Development.

It happens to be the truth. With good pop control and good long term economic focus, BD has done quite well. India will benifit in the long term through lessening of the illegal immigration probelm. Political mudslinging will continue for a while and then die down.
 
Bangladesh eating the fruits of being in a peaceful neighborhood...... border sharing with only 2 countries who are very peaceful..... India and Myanmar......

Bangladesh hence can divert total focus on economic development..... lucky BD.....
 
Congrats to bangladeshis, true fighters. When urdu was imposed on them they did not accept, when they were taunted as dark and ugly they did not accept. They made their own destiny. ANd now enjoying the fruits of their struggle. The have a coherent nation where laws are made in their own language, an army which commands in their own language. They dont have to waste their energe trying to control and where the people of the land are not interested like Kashmir. All the best to them.
 
I hope India finds a way to move forward towards a faster growth, unfortunately Modi/BJP ran all the qualified people out of office.
 
Explained: What IMF data say about the per capita GDP of India and Bangladesh

According to economist Prof Kaushik Basu, it is shocking that India had lost its 25% lead from five years ago, and was now trailing Bangladesh. What do the data show about the future, though?

By: ENS Economic Bureau | New Delhi |
Updated: October 15, 2020 7:49:33 pm

Cornell University’s Professor of Economics and former Chief Economist of the World Bank Kaushik Basu has said that the International Monetary Fund’s (IMF’s) latest projection of Bangladesh’s real per capita GDP surpassing India’s real per capita GDP, after India had a lead of 25 per cent five years ago, is shocking, and calls for “bold fiscal/monetary policy”.

“I’ve now checked the data. IMF’s estimate shows Bangladesh will cross India in real GDP per capita in 2021. Any emerging economy doing well is good news. But it’s shocking that India, which had a lead of 25% 5 years ago is now trailing. This calls for bold fiscal/monetary policy,” Basu posted on Twitter.

What do the IMF data show?

In its latest World Economic Outlook released this week, the IMF has projected the Indian economy to contract 10.3 per cent in 2020-21, a deeper hit than the June estimate of 4.5 per cent contraction in the wake of the economic slump due to Covid-19pandemic.

“Revisions to the forecast are particularly large for India, where GDP contracted much more severely than expected in the second (April-June) quarter. As a result, the economy is projected to contract by 10.3% in 2020, before rebounding by 8.8% in 2021,” it said.


The Reserve Bank of India has projected a 9.5 per cent contraction for the Indian economy in 2020-21.

What does the per capita GDP comparison show?
India’s per capita GDP, in nominal US dollar terms, is projected to be $1,876.53 in 2020, lower than $1,887.97 projected for Bangladesh. On average, India’s per capita GDP has been 24 per cent higher than Bangladesh’s during the last five years, IMF data show.

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After a blip however, India’s per capita GDP is expected to overtake Bangladesh’s per capita GDP in 2021, with the IMF projecting it to be $2,030.62 as against $1,989.85 of the latter.

However, the trend is not expected to sustain for long as India’s per capita GDP is then again expected to slip below Bangladesh’s per capita GDP in 2024 to $2,544.26 as against $2,544.32.

In 2025, India’s per capita GDP is projected to be $2,729.24, again lower than Bangladesh’s projected per capita GDP of $2,756.10, the IMF said.

What does the government say on the rankings?

Government sources have said that in terms of purchasing power parity, India’s per capita GDP was 11 times higher than that of Bangladesh in 2019, PTI reported. India’s per capita GDP in PPP terms in 2020 was estimated by the IMF at $6,284, compared with $5,139 per capita GDP (PPP) of Bangladesh for 2020, the report said.

 
IMF report on Bangladesh surpassing India’s per capita GDP reveals economy’s ‘Achilles’ heel’

In episode 592 of #CutTheClutter, Shekhar Gupta explains how India lost a 40% per capita income lead to Bangladesh in the past 5 years.
THEPRINT TEAM15 October, 2020

File image of Indian PM Narendra Modi and Bangladesh PM Sheikh Hasina | Photo: PIB
File image of Indian PM Narendra Modi and Bangladesh PM Sheikh Hasina | Photo: PIB

New Delhi: The International Monetary Fund Global Economic Outlook report, which projected that Bangladesh is set to surpass India’s per capita income in 2020, has exposed “India’s Achilles’ heel”, said ThePrint’s Editor-in-Chief Shekhar Gupta in episode 592 of ‘Cut the Clutter’.

The report states that this year, the Indian economy will be among the steepest declining economies in the world. After Italy and Spain, which were infected by Covid-19 early on, and maybe even France, India’s economy will suffer the most this year because of coronavirus, said Gupta.

According to the IMF’s projection, the Indian economy will fall anywhere between 10.3 – 10.6 per cent, while Bangladesh’s economy will grow by 4 per cent. If this happens and the projections are correct, Gupta said, then by the end of this financial year Bangladesh’s per capita income will be higher than India’s.

He made a disclaimer and said that IMF’s projections are not always correct and said, “Frankly, it’s for us Indians to prove them wrong. There isn’t much time left in this financial year, but you can still try and prove them wrong.”

Decline did not happen in just 1 year

Gupta explained that if Bangladesh’s per capita income exceeds India’s, then the latter will be the fourth-richest country in South Asia after Sri Lanka, Maldives and Bangladesh.

This would be an eye opener and a very rude shock due to the common perception among Indians that Bangladesh is a basket case, especially in the current political atmosphere and in the context of the Citizenship Amendment Act (CAA), he added.

Explaining the economics of the situation, Gupta said that even if India improves in the next year with a projected growth rate of 8 per cent, it would be on a base which has already been lowered this year by the 10 per cent fall. He also cautioned that this over 10 per cent decline is not something that happened in just one year.

According to Gupta, five years ago, India’s per capita income was 40 per cent higher than Bangladesh’s.

Therefore, to potentially be below Bangladesh now would have required a lot of work, in the wrong direction. Gupta explained that data from the last five years showed that Bangladesh’s economy had grown at 9.1 per cent compounded whereas India had grown at only 3.2 per cent compounded.

Need to ask what happened in last 5 years

Looking at the figures and data, Gupta said that India needs to raise questions to its leadership and Prime Minister Narendra Modi about what happened in the past 5 years.

Leave aside this year as it was a different story, but we need to ask the government what happened in the last five years that the country lost its growth momentum to such an extent, he said, adding that Covid was only an excuse for this year.

Decisions like the nationwide lockdown and demonetisation are examples of a decisive government, which was not going through any debate or discussion.

Gupta said, “India has gone back to protectionism, India has gone back to weaponising the tax agencies and India has gone back into a trade aversion, foreign trade aversion. “

Furthermore, if Bangladesh was growing fast it was because it is an export powerhouse today, something India no longer is. And while Bangladesh’s exports have boomed, India’s exports have stalled and declined, he said.

Also read: Govt open to announcing more measures to boost demand, finance ministry says

India needs a reality check, dose of humility

Speaking about India’s position in the neighbourhood and previous equation with Bangladesh over the years, Gupta explained that India has had the best relations with the country in the past 10-15 years.

It has had the most important strategic equations with the country, Bangladesh also de-Islamised their governance and cooperated with India “beautifully and marvellously” on control of terrorism. The latter also supported India in its ‘tussle’ with Pakistan.

However, despite all this and because of India’s domestic politics, with respect to CAA, India started a completely “madcap” campaign to malign Bangladesh, said Gupta.


He then referred to an article by Swati Narayan in The Indian Express, which said that on all major indices such as global hunger index, gender development index, world happiness index, immunisation, infant mortality etc, Bangladesh was ahead of India. And India was ahead on only two indicators — per capita income and human development indicators.

Gupta said India needed a reality check and a dose of humility. It now needs to look within and gauge how we got here.


He highlights several lessons to this end. The first lesson is to respect neighbours including Bangladesh, second to acknowledge that Bangladesh was leaving us behind and that it was no fluke and third, we have to look within.

Gupta said that at present Bangladesh was the only sizeable friend in the neighbourhood and India should be careful as China’s Xi Jinping is reaching out to Bangladesh desperately with a blank cheque book.

The situation is so serious that even the US is worried about the Chinese influence in the neighbourhood, he said.

Gupta said that even though work is going on to repair relations with Bangladesh, it would be futile if we continue maligning the country. This continues to be the central point of our politics, especially with the West Bengal elections coming up.

 
You don't need to dissect each of those, I was referring to them as a source of consumption. What exactly is the consumption in Bangladesh?

Given each has a savings rate of 30%, and similar per capita, Indian consumption is off the chart. Smartphones are basic these days, your sales are 7 million (70% < 8000 taka).

This is useless. For exemple for long time Pakistan imports of smartphones was $200m. Now after IMEI ban of smuggled smartphones, imports have increased to $1.4B in just 1 year. And now we will also see more and more local manufacturing of smartphones which will mean cheaper phones.

Car you can get for $6k in India cost like $15k in Pakistan. So numbers of cars sold is again pointless metric. Not to forget pretty much all of cars in western Pakistan are smuggled and not even on official record.

First look at how much cars cost in Bangladesh then it will be fair comparison.

It has had the most important strategic equations with the country, Bangladesh also de-Islamised their governance and cooperated with India “beautifully and marvellously” on control of terrorism. The latter also supported India in its ‘tussle’ with Pakistan.

So Gupta doesn't have guts to say that its hindutva politics that is the reason for relations going sour. BD went all the way to control its religious extremists while India went all the way to promote hindu extremists.
 
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If india sells 3 million cars in a year then china sells 3 million in a month.
 

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