Context:
Global Purchasing Power Parities (PPP) Data Released for 2021
Key Findings:
- Largest economy in 2021 – China followed by US on the basis of PPP.
- India’s position – 3rd largest economy ($11.0 trillion), accounting for 7.2% of Global GDP.
- On the basis of GDP ranking, India is 5th largest economy at present.
- High-income economies with just 16.4 % of world’s population accounted for 46 % of the global GDP.
- Low-income economies (8.4 % of world’s population) accounted for just 1 % of global GDP.
PPP:
- Rate at which the currency of one country would have to be converted into that of another country to buy the same amount of goods and services in each country.
- Used to convert the national poverty lines from some of the poorest countries in the world to determine the Global Poverty Line.
- For poverty estimation in India, the Tendulkar committee computed poverty lines for 2004-05 at a level that was equivalent, in PPP terms, to Rs 33 per day.
- Significance – PPP provides more accurate measure of living standards across countries than Market exchange rate (MER)- based estimates.
- MER often inflates the buying power of high-income countries (where prices are high) and underestimates that of low-income ones (where prices are lower).
Source: World Bank
Previous Year Question
Which of the following is/are the indicator/indicators used by IFPRI to compute the Global Hunger Index Report?
1. Undernourishment
2. Child stunting
3. Child mortality
Select the correct answer using the code given below.
[UPSC Civil Services Exam – 2016 Prelims]
(a) 1 only
(b) 2 and 3 only
(c) 1, 2 and 3
(d) 1 and 3 only
Answer: (c)
