Population and GDP per Capita: Does India’s Population Impact Its Economic Status?
The relationship between population and economic indicators such as GDP per capita is a complex issue. Often, it is assumed that a smaller population would result in higher GDP per capita. However, the reality is more nuanced. This article will explore the factors that truly influence GDP per capita and whether India’s population size has a significant impact on its economic status.
Understanding GDP per Capita
GDP per capita is the total GDP divided by the population. It provides an estimate of the average income earned by each individual in a country. GDP, or Gross Domestic Product, represents the total value of goods and services produced within a country. Hence, GDP per capita is a crucial indicator of the standard of living and economic well-being of a nation's citizens.
Role of Productivity in Economic Growth
Productivity plays a significant role in determining economic outcomes, including GDP per capita. Unlike a simple mathematical relationship between population and GDP per capita, the economy's productivity is what truly drives the standard of living. The productivity of a country's workforce, which translates to the value addition capacity of its citizens, is much more influential than mere population numbers.
In the case of India, though it is true that the current population is over 1.4 billion, the productivity is still relatively low. If the population decreases, there would indeed be a corresponding decrease in total GDP, which would result in a lower GDP per capita. Conversely, increasing productivity can lead to economic growth and improved standards of living, as has been seen in India's high growth rate of around 7%.
Implications of Low Population and GDP per Capita
There are numerous examples around the world where countries with low population face low per capita income. For instance, many countries in South America have low populations and similarly low per capita incomes. This phenomenon is not limited to South America; it is a global issue. Countries in Asia such as Myanmar and Bangladesh have lower population growth rates and lower per capita incomes compared to India.
Factors Influencing Economic Development
The effectiveness of a country's administration and governance is a critical factor in determining economic development. If governance is incompetent, even a smaller population might not translate into higher GDP per capita. India, despite its large population, has abundant land and resources to support its citizens. However, there are vast underutilized areas in the country that are sparsely populated.
To achieve sustainable economic development, India needs extensive infrastructural development and a reduction in bureaucratic inefficiencies. A stable government with a clear vision is essential to propel the country forward. India does possess the talent, will, and determination required to achieve remarkable economic growth. However, a clean and clear platform without unnecessary hurdles is necessary to harness these strengths.
India has shown progress in economic development, having overtaken the UK to become the fifth-largest economy in just 9 years under the BJP administration. However, more needs to be done to address the challenges of a large and diverse population and to ensure that the economic benefits are accessible to all citizens.
Conclusion
The relationship between population and GDP per capita is not as straightforward as it might seem. While a smaller population can lead to higher GDP per capita, it is the productivity and efficient governance that truly drive economic growth and improve the standard of living. India has the potential to achieve significant improvements in these areas, provided the necessary reforms are implemented.