INDIA AHEAD OF JAPAN IN PURCHASING POWER PARTY

Data released by the international Monetary shows that India’s GDP in ‘purchasing power parity (PPP) terms stood at US dollars 4.46 trillion in 2011, marginally higher than Japan’s 4.44 trillion dollars, making India the third biggest economy after the US and China . 

India’s share in world GDP in terms of PPP stood at 5.65 per cent in 2011 against Japan’s 5.63 per cent. This gap is expected to widen significantly in the next five years as IMF estimates India’s share in world GDP to grow to 8.09 per cent compared with 4.8 per cent for Japan. 

The GDP of USA in terms of PPP in 2011 stood at 15.1 trillion dollars and that of china at 11.3 trillion dollars, however, per capita GDP of India was behind these three economies. It was a mere US 3, 694 dollars compared to 48, 387 of USA, 34, 740 of Japan and 8, 382 of China.

Comparative Rating Index of Sovereigns (CRIS): The Ministry of Finance has developed a comparative Rating Index of Sovereigns (CRIS) and also released an estimation of CRIS over the last five years for different nations belonging to different blocs of the world. 

The index enables a comparison with various countries’ sovereign ratings using Moody’s ratings and data of nations given by IMF. India’s score has risen from 23.81 in 2007 to 24.65 in July 2012. In other worlds, in relative terms, Indian has become a better investment destination by 3.52 per cent. India’s rank in terms of CRIS moved up from 61^st position in 2007 to 54^th in July 2012, out of 101 economies. The improved score is partly due to the decline in scores of some European nations leading to deterioration of the world average by over 4.8 per cent. 

Paraguay, Indonesia and Peru were the countries that registered the maximum increase in their ratings between 2007 and 2012 while Portugal, Ireland and Pakistan witnessed the biggest fall in the Index.

All the BRICS countries recoded improvements in their ranks as well as index value. Among other economies recording increase were Israel, Saudi Arabia, Botswana, Philippines, Uruguay, Lebanon and Bolivia. 

Interestingly, though the US score rose from 32.11 to 32.79, it slipped in ranking to 13^th position form being on top of the chart in 2007.

Gini Coefficient: it is a coefficient based on the Lorenz curve showing the degree of inequality in a society. It is measured as follows. 

G= Area between the Lorenz curve and 45˚line

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     Area above the 45 line

If the frequency distribution is equal i.e. if there is perfect equality in the society, the Lorenz Curve coincides with the 45˚ line and G= Zero similarly if there is perfect inequality, G will be equal to 1. Thus, depending upon how far the Lorenz curve moves away from 45˚ line, there will be greater inequality the father the curve moves away from the 45 ˚ line.