In the year 2014, India was the 10th largest economy in the world, with GDP of 2.07 trillion USD. In 2025, we have become the fourth largest economy with GDP of 4.18 trillion USD, in merely 11 years. For international comparison, another figure which is universally accepted, is GDP in purchasing power parity terms. On the scale of purchasing power parity, India had already become the third largest economy of the world, much earlier (in the year 2011). This happened because the purchasing power of the Indian rupee in India is nearly four times the market value of the dollar. According to the World Bank, India’s GDP (PPP) in 2014 was approximately 7.4 trillion USD, which has increased to 17.4 trillion USD in 2025. Today, when India's GDP has reached the fourth position in the world, apart from celebrating the same, it is also important to understand how this was made possible and how we can make our economy stronger by learning from the contemporary world and history.

Some people argue that GDP, Japan’s per capita income is still 11.6 times more than that of India’s per capita income, but if we compare per capita income of these two countries on PPP basis, we see Japan’s per capita income is hardly 4.16 times, of India’s GDP per capita. There is yet another view that we need not celebrate this achievement, because India still stands at 136th position in terms of Per Capita GDP in nominal terms, and even in purchase power parity we stand at 119th position in the list of 190 countries of the world. But these numbers reveal less than they hide. There are 18 big countries in terms of population, which have Per Capita GDP above India, with a total population of nearly 3.4 billion, and rest 100 countries have a total population of only 14 crore (0.14 billion). Thanks to the higher rate of growth of per capita income, both in nominal terms as well as in PPP terms, India is riding fast on the ladder, and its ranking is fast improving. In 2014, India ranked 147th out of 190 countries in Per Capita GDP, in nominal terms; but in 2025; its position has since improved to 136th in Per Capita GDP in nominal terms. And in per Capita GDP in PPP terms, India has moved up from 126th out of 190 countries in 2014, to 119th now.

According to the Global Multidimensional Poverty Index (MPI) 2015 (based on 2005-06 and 2011-12 data), around 41.3 percent of India’s population was multidimensionally poor in 2005-06. Major deprivations were manifested in nutrition, child mortality, years of schooling, sanitation and cooking fuel. With rural poverty, significantly higher than urban poverty, India accounted for over 30 percent of the world’s multidimensionally poor. UNDP reports that from 2005–2006 to 2019–2021, India’s multidimensional poverty index (out of a total of 1.000) had plummeted from 0.283 down to just 0.069; which is perhaps fastest reduction among countries facing acute multidimensional poverty. Interestingly, UNDP has praised India for this achievement.

As per NITI Aayog’s Multidimensional Poverty Index Report (2023) and the UNDP Global MPI 2023, Headcount ratio was reduced to 11.28 percent (as of 2022–23), and over 24.82 crore people exited multidimensional poverty between 2013–14 and 2022–23. Deprivations fell significantly in terms of access to electricity and clean cooking fuel, sanitation, housing, school attendance, maternal and child health etc. Bihar, Uttar Pradesh, Madhya Pradesh, and Rajasthan saw the highest reduction in Multidimensional Poverty. If we look at extreme poverty (people with daily income of 2.15 USD), according to the World Bank’s latest report (2025) India has virtually eliminated extreme poverty by global standards. In 2011 estimated 27.12 percent of India’s population lived in extreme poverty, that is approximately 344.5 million people. Extreme poverty has come down to around 5.3 percent, by 2022-23, that is, estimated 75.2 million people live in extreme poverty in the country. But, this is the scenario of extreme poverty in India, when in the meanwhile, World Bank has raised the threshold limit for extreme poverty from earlier, 2.15 USD to 3 USD per day now. That implies that if we keep the threshold poverty line at the same level of 2.15 USD, number would be hardly 2.3 percent of population and absolute number of people under extreme poverty would be hardly 33.6 million. This could be made possible due to direct benefit transfers (DBT), free food, access to basic services, namely sanitation, health, banking and electricity. Some people argue that GDP numbers indicating India becoming fourth largest economy] but government distributing free ration to more than 80 crore people are contradictory to each other. But here we have to understand that distribution of free food is not unique to India, even in most developed countries including US and UK, a significant proportion of their population enjoy free ration. 

Though, it is no less a reason to celebrate that India has become the fourth largest economy of the world; and is destined to become the third largest economy in the coming 2-3 years; it gives us more reasons to be proud of India’s achievements, whether it is in terms of international ranking in GDP per capita or in its achievements in reducing multidimensional poverty and extreme poverty, both; and that too much faster than its peers. Though there is a long road to go, but the journey so far has also been remarkable. This fact should also be borne in mind so that we may continue to tread the right path.