Economic wellbeing? India 17th in Asia

India's 9 per cent GDP growth may not mean much for the masses, going by an ADB study which says India is ranked 17 among 23 when economies are compared based on a measure of people's economic well-being.

Emerging economic power and neighbour China doesn't fare much better either as the communist country is ranked just two slots above at 15.

According to International Comparison Program (ICP) in Asia and the Pacific's Purchasing Power Parity Preliminary Report, China and India account for 64 per cent of total real GDP of the 23 economies participating in the study.

However, if the size of these economies is adjusted by population, China and India drop down to 10th and 18th positions, respectively, in the full GDP comparison.

Similarly, China ranks 15th and India 17th when economies are compared based on 'actual final consumption of households,' a better measure of economic well-being of the population, the study reveals.

AFCH is a measure of what households actually consume, comprising what they purchase and what they are supplied for individual use by the government (principally education and health). The economic well-being of population is obtained by comparing household consumption expenditure per capita.

The five economies that top the list are Hong Kong (125,303 HK dollar per capita), Taipei (109,108 HK dollar), Singapore (99,706 HK dollar), Brunei Darussalam (81,744 HK dollar) and Macao (67,639 HK dollar ). Nepal, Bangladesh, Lao PDR, Cambodia and Vietnam are at the bottom.

As for the people living in the two giant economies, a person living in China spends an average of only 11,502 HK dollar (Rs 59, 369) per year, while an Indian consumes an average of 9,346 HK dollar (Rs 48,240) per year.

Purchasing Power Parities (PPP) is an idea popularised by the earlier Economists Big Mac Index which prices hamburgers in global cities for a quick and crude comparison of living standards. ICP is more comprehensive as it covers a broader range of commodities, the ADB study said.

Based on the Price Level Index (PLIs), which is the ratio of the PPP to the exchange rate, Fiji Islands and Hong Kong are the two costliest places to live in followed by Macao and Singapore. China ranks eighth and India 16th in terms of PLIs, the study said. The Cheapest places are Lao PDR, Vietnam, Iran, Cambodia and Nepal.

"The results provide the most comparable information on breakdown of GDP expenditures across the Asia Pacific," ADB chief economist Ifzal Ali said.

PPP is a more appropriate currency converter to compare living standards and structure of economies than market exchange rates, he added.

Results of the study are deployed for investment strategies, the global campaign against poverty and national policies like spending on schools or infrastructure in Asia.

Real GDP estimates were done using assumed growth rates and how long it would take some countries to reach certain levels of per capita real GDP, the ADB study said.

For example, India needs more than 30 years to come up to the 100,000 HK dollar per capita real GDP level and almost 50 years to match Brunei's per capita real GDP, if it continues to grow at an annual per capita rate of 6.5 per cent. Brunei has a per capita real GDP of 2,69,581 HK dollars.

ICP Asia Pacific is part of a global initiative managed by ADB in collaboration with ICP Global Office and other regional agencies. The results enable a robust cross-country comparison of major macroeconomic indicators across diverse economies of Asia and the Pacific.