India surpasses UK to become world's fifth biggest economy, GDP to grow more than 7 per cent this year

India has surpassed Britain to become world’s fifth largest economy, Bloomberg reported on Friday. The change in ranking has pushed the United Kingdom to the sixth spot as the country continues to grapple under the brutal cost-of-living shack. 

The Indian economy is forecast to grow more than 7 per cent this year. On an adjusted basis and using the dollar exchange rate on the last day of the relevant quarter, the size of Indian economy in “normal” cash terms in the quarter through March was USD 845.7 billion. On the same basis, UK was USD 816 billion, according to the report.

IMF’s own forecasts show India overtaking the UK in dollar terms on an annual basis this year, putting the Asian powerhouse behind the US, China, Japan and Germany. A decade ago, India ranked 11th among the largest economies, while the UK was fifth. 

The government is expecting the economy to grow at 7-7.5 per cent in 2022-23, in line with its projections made at the beginning of this financial year. India registered a growth of 8.7 per cent in 2021-22. 

"We remain on course to meet the 7.4 per cent. We expect to achieve. This does not really reflect on what is expected to be annual real GDP growth. So, 7-7.5 per cent in that range. 7.4 per cent is what the IMF has predicted," Finance Secretary T V Somanathan said on Wednesday.

The statement came after the release of the GDP numbers, which showed the economy grew by 13.5 per cent in the April-June quarter, much below the RBI's projection of 16.2 per cent.

He was briefing reporters after the release of the GDP numbers, which showed the economy grew by 13.5 per cent in the April-June quarter, much below the RBI's projection of 16.2 per cent.

"I am not going to make a prediction more accurate than the RBI...But I am saying that today's figure in no way is throwing us off course or what was expected and what we continue to expect. It is fully consistent with that expectation of somewhere in the region of 7-7.5 per cent real GDP growth. It is fully consistent with that," he said.

So, he said, this is very consistent with the annual estimates by international organisations as well as from the Reserve Bank of India. The RBI has projected a growth rate of 7.2 per cent for the current financial year.

He further said the real GDP further increased to Rs 36.85 lakh crore in Q1 of FY 2022-23, registering a year-on-year rise of 13.5 per cent and growth of 3.8 per cent over Q1 of FY 2019-20.

With a 13.5 per cent growth rate, the GDP has recovered the pre-pandemic output and gone beyond by near 4 per cent, he said.