The Rise of Bangladesh

In October 2020, IMF had published its projections in the World Outlook Report in which it is expected that India’s GDP (Gross Domestic Product) will contract by 10.3% and Per Capita Income by 11.2% in 2020-21. This is more than double of what IMF had projected as a contraction of 4.5%. This shows that India could have performed economically better than how it has actually done. 

A very surprising thing has also been shown in this report. According to the report, Bangladesh’s GDP will increase by 3.8% and it’s Per Capita Income will reduce by 2.9% in 2020-21. This is far better than projections of India. It implies that Bangladesh has performed far better than India, despite going through the coronavirus pandemic.

Let us see the reasons behind it and what all India can learn from Bangladesh to perform better in the Pandemic.


The primary reason is that Bangladesh has grew at rapid rates since 2004 as we can see in the chart 1 below. We can see that India’s growth till 2016 was better than Bangladesh but from 2017, GDP growth rate is decelerating while Bangladesh is accelerating at a good pace. It has managed to maintain a good pace for increasing its GDP.

It is to be noted that Bangladesh has performed better than India in terms of controlling population growth. As Per Capita Income in inversely related to population of the country, those countries with lower population are in an advantage as well. Hence Bangladesh is benefitted by having lower population as well. 

One of the other key factors in Bangladesh’s rise is due to contribution of Nobel Prize Winner Muhammad Yunus.

He founded the Grameen Bank in Bangladesh. It is considered as the key driver of micro finance revolution, which gave collateral-free small loans, predominantly to poor and women.

These loans were used for household micro enterprises like dairy, poultry, farming, handicrafts etc. They setup small businesses and the repayment rates were more than 99%.

Can India Take the Lead?

The answer to this question is YES and NO, both. According to the calculations by IMF, India will take the lead in 2021 but will get on the backseat in 2024. One of the interesting facts is that even after having lower per capita income, an Indian is able to afford more things as compared to a Bangladeshi citizen as the inflation in India is less than that in Bangladesh.

Interesting Facts

One of the interesting facts is that even after having lower per capita income, an Indian is able to afford more things as compared to a Bangladeshi citizen as the inflation in India is less than Bangladesh.

It is not only Per Capita Income and GDP in which India is lacking behind but there are various facts in which Bangladesh has performed better than India. According to HDI:

  • An average Bangladeshi lives 3 years longer than an average Indian, that is, life expectancy has improved there because child malnutrition rate is lower
  • Female participation in the work force in Bangladesh (36.4%) is greater than that in India (20.3%).
  • In terms of literacy, Bangladesh and India are nearly equal. 74.4% Indians are literate compared to 73.9% of Bangladesh.
  • Bangladesh has been able to pull people out of agriculture. In other words, reduce their dependency on farming, and have them have further skills.
  • Bangladesh exports have risen almost exponentially whereas Indian exports are seeing a decline in numbers.

Steps India Should Take:

We all know that Indian economy is based on informal/unorganized sector. More than 80% earnings in India depend on small and micro enterprises. Hence, the government must implement packages for these enterprises.

Indian economy also needs to improve the investment by exporting. To do so, the Indian government must maintain good ties with its neighboring countries.

The NPAs of Banks have increased drastically in the recent years. To tackle this, the government must amend laws and give more powers to banks to recover NPAs. 

The government must maintain liquidity in economy. It must provide direct cash support and in kind support (like cereal, pulses, medicines etc.) to economically weak population.


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