Explained: How Bangladesh’s economic growth is stealing India’s thunder

News:The economic outlook update released by the Asian Development Bank(ADB) has shown how Bangladesh is the standout economy in terms of growth momentum in South Asia.

Facts:

What did the report said?

• The report has said that Bangladesh has been experiencing high and consistently rising economic growth rate while maintaining a stable level of inflation.
• In 2016,Bangladesh has been growing at over 7% and in 2019 it is expected to cross the 8% threshold as well.
• On the other hand,India has seen a secular decline from 2016.The constant declining industrial productivity and sales suggests that the current financial year India is unlikely to get anywhere close to the 7%.

What distinguishes Bangladesh from India?

• The structure of Bangladesh’s economy is quite different from India.
• In India, the services sector contributes overwhelmingly but in Bangladesh there is a booming industrial sector.This allows its economy to create jobs. 
• In India,the bulk of the population is still stuck in the agriculture sector, which contributes the least to the GDP. 
• The industrial sector which has the maximum potential to absorb surplus labour from agriculture is struggling to grow fast enough and create employment.
• Further,despite the trade war between the US and China intensifying over the past year,Bangladesh’s exports have grown from 6.7% in 2018 to 10.1% in 2019.