World Bank Changes Classification Of Countries: India Is Now ‘Lower-Middle Income’ Economy
The World Bank is doing away with the decades-old nomenclatures of ‘developed’ and ‘developing’ economies to classify countries on their prosperity and standard of living. With every country becoming less homogenous, the World Bank is switching to more precise descriptions of economies.
The classification of the countries will be based on their gross national income (GNI):
- Low-income economy: Countries with GNI per capita of $1,045 or less
- Lower-middle income economy: Countries with GNI in the range of $1,046 to $4,125
- Upper-middle income economy: Countries with GNI in the range of $4,126 to $12,735
- Top economy: Countries with GNI of $12,736 or more
There are many developing countries across the world, for instance, Mexico and Malawi are ‘developing’ countries but their characteristics differ dramatically. Under this new classification, Mexico with a GNI per capita of $9,860 is upper-middle income country and Malawi, with a GNI of $250 is a low-income economy.
Where India stands?
According to World Bank reports India has been classified under lower-middle income economy. According to IBTimes, it has got the same tag along with countries like Lesotho, Zambia, Honduras, Ghana, Guatemala and Djibouti. All the other countries in the BRICS — Brazil, Russia, China, South Africa — belong to upper-middle income group.
Bangladesh, Bhutan, Pakistan, Myanmar are in the same group with India.
According to the World Bank, India lacks in the world indicators like labour force participation rate, electricity generation and access to better sanitation facilities. In spite of these changes in terminology, the institutions like UN, other economists, politicians and media houses may still keep referring countries to the old ‘developed’ or ‘developing’.
The Logical Indian urges the government of India to bring more transparency and set new reforms to regulate the economy. We have a long journey to take before we can be actually deemed as developed.