India retains its position as 3rd-largest economy on PPP basis for 2017

India has retained and consolidated its position as the third-largest economy after China and the US in terms of purchasing power parity (PPP) for 2017, said the government on Tuesday quoting the World Bank data.

PPP of the rupee per dollar at the gross domestic product (GDP) level rose to 20.65 in 2017 from 15.55 in 2011, while the exchange rate of a dollar to a rupee rose to 65.12 from 46.67 during the period.

Also, the Price Level Index (PLI), the ratio of a PPP to its corresponding market exchange rate, which is used to compare the price levels of economies, improved to 47.55 in 2017 from 42.99 in 2011.

“In 2017, India retained and consolidated its global position, as the third-largest economy, accounted for 6.7 per cent (USD 8,051 billion out of world total of USD 119,547 billion) of global GDP in terms of PPPs as against China (16.4 per cent) and the US (16.3 per cent), respectively.

“India is also third-largest economy in terms of its PPP-based share in global actual individual consumption and global gross capital formation,” said the release of the National Statistical Office (NSO).

The World Bank has released new PPPs for the reference year 2017, under the International Comparison Program (ICP), that adjust for differences in the cost of living across economies of the world. Globally, 176 economies participated in 2017 cycle of ICP.

The ICP is the largest worldwide data collection initiative, under the guidance of UN Statistical Commission (UNSC), with the goal of producing PPPs, which are vital for converting measures of economic activities to be comparable across economies.

Along with the PPPs, the ICP also produces PLI and other regionally comparable aggregates of GDP expenditure.

India has participated in almost all ICP rounds since its inception in 1970.

As per the release, in 2017, India retained its regional position, as the second-largest economy, accounted for 20.83 per cent of the regional gross domestic product (GDP) in terms of PPPs where China was at 50.76 per cent (first) and Indonesia at 7.49 per cent (third).

India is also the second-largest economy in terms of its PPP-based share in regional actual individual consumption and regional gross capital formation, it added.

The next ICP comparison will be conducted for the reference year 2021.