India overtakes UK to become world’s fifth largest economy; politicians, industrialists welcome news

India surpassed the United Kingdom to become the fifth largest economy in the world on Friday, according to a report by Bloomberg.

The calculations have been made in terms of US dollars and historic exchange rates on the Bloomberg terminal and based on Gross Domestic Product (GDP) figures from International Monetary Fund (IMF) database.

New Delhi leapt past Britain to the sixth spot in the last three months of 2021, as the latter faces a cost-of-living crisis amid rising inflation—the highest in four decades—a potential recession that the Bank of England says may last well into 2024, and a leadership crisis after Boris Johnson's resignation.

By contrast, the Indian economy is forecast to grow more than 7 percent in 2022.

Also read: India @ 75: The economy report card

According to the Bloomberg report, on an adjusted basis and using the dollar exchange rate on the last day of the relevant quarter, the size of the Indian economy with regards to ‘nominal’ cash was $854.7 billion during the quarter through March. The corresponding figure for the UK stood at $814 billion.

UK GDP grew just 1 percent in cash terms in the second quarter and, after adjusting for inflation, shrank 0.1 percent. Sterling has also underperformed the dollar relative to the rupee, with the pound falling 8% against the Indian currency this year, as per the Bloomberg report.

India welcomed the news. Finance Minister Nirmala Sitharaman shared an excerpt from the report on Twitter, Union Health Minister Dr Mansukh Mandaviya tweeted saying "India is writing new pages of success."

Business Tycoon Anand Mahindra also took to Twitter to laud the development.

"The law of Karma works. News that would have filled the hearts of every Indian that fought hard & sacrificed much for freedom. And a silent but strong reply to those who thought India would descend into chaos. A time for silent reflection, gratitude," he said.

Bharatiya Janata Party (BJP) spokesperson Sambit Patra said that India is now ahead of those who ruled it.

"India has taken over the UK and become the fifth largest economy in the world. Once, who ruled us are now behind us in the economy. However, Congress is unable to shed its colonial mindset," he said while addressing the media.

The IMF's forecasts also show India pegged to overtake the UK in dollar terms on an annual basis in 2022, placing India just behind the US, China, Japan and Germany.

Almost 10 years ago, India was ranked the world’s 11th largest economy, while the UK stood at the fifth spot.