Economics in the Global Environment: Living Standard Comparison of UK and India in 2030

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ECONOMICS IN THE GLOBAL ENVIRONMENT

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Contents
Introduction................................................................................................................................3
Comparison of the living standard of UK with India in 2030....................................................3
Analyses of two policies of India that are aimed at improving living standard.........................5
Case study analysis of an individual business for new product entry in Indian market............7
Conclusion..................................................................................................................................9
Reference..................................................................................................................................10

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Introduction
Economy of a country is not only a system of production and consumption of goods and
services; it also works as a tool for the further development. The activities within an economy
also pave the way for the future scope for the nation. One such scope for any nation is the
living standard, which is a gift of the economy to the country. Living standard is referred to
as the quality of living of the general population of that country. This depends mainly on the
economic capability of the country. This is why; living standard differs between a developed
nation and a developing nation. The objective of this paper is to shed light on the economy of
a non OECD country, India vis-à-vis the economy of the United Kingdom.
Comparison of the living standard of UK with India in 2030
The UK and India have a lot of difference in terms of the structure of economy and the cost
of living. That has also shaped the living standard in the respective nations. Currently in
terms of the economic measurements, the condition of the UK is way better than that of India.
While, the savings rate and the per capita income in the economy of UK is very among the
world leaders, the widespread unemployment and economic backwardness in India has
resulted in an unbalanced economic performance (Kumar and Dahiya, 2017). India, as per the
figure of 2019, is one of the fastest growing economies of the world. It is also expected to
surpass the economy of the UK in the recent years. However, existing inequalities have
hampered the distribution of the wealth it has acquired over the years. The Economist (2019)
stated that, persistent inequality, corruption and unemployment has restricted the growth path
of the economy of India. Hence, the living standard has, from the very beginning been very
low compared to the UK.
The UK on the other hand, as per the data of the year 2019, shows a very stable economy
with a high domestic private savings rate . Although the economic growth rate has slowed
down after the financial crisis of the year 2007, it still has maintained a healthy growth rate
compared to the other developed economies of the world. In addition to that, the government
of the UK has also managed to increase the rate of employment in the country that led to the
improvement in the living standard of the people as well. UK Parliament (2019) stated that,
the economic performances of the UK post the financial crisis has been the most exceptional
among the European nations and that lead to the decision to exit the European economic
cooperation.

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Now in the coming years, both the economies will grow towards forward direction and
whether there will be convergence between the economies of the two countries depend on a
lot of factor (Zwart, 2015). On paper, mathematically, as per the theory of development it is
possible for the economy of India to catch up with the living standard of the UK as the
economic remains to grow. However, there are few factors which in practical works and that
is why catch up effects have not been seen in the real life. The Economic Times (2019)stated
that, the aim of the government should be to minimise the effects of these factors so that the
economic growth can fully manifests and living standard improves in the economy of India.
Therefore, while on paper it is possible to catch up, the likeliness in the real life is not much.
The reasons are the factors which are discussed below.
First and the most important factor is the growth rate of economy of India and the UK. India
has been growing very rapidly compared to any other OECD nations including the UK.
According to the data of the year 2017, the growth rate of economy of India is around 7.1% .
While on the other hand the growth rate of the economy of the UK is 1.7%. That means if the
economy of India grows at the same rate, it will come a lot closer to the economy of the UK
by the year 2030. However, the living standard of that country is not a direct reflection of the
national GDP of that country. Ft.com. (2019) stated that, presence of high inequality in the
economy can result in a low living standard even in the presence of high national GDP.
Another factor is the transparency in the government. Mumtaz and Theophilopoulou (2017)
noted that, developing countries like India also faces widespread corruption which in turn
impacts on the distribution of the wealth. India can only go close to or reach the living
standard of living only if corruption can be eliminated fully. However, this is a tough job to
implement by the government. It will take a lot of monitoring from the side of the
government. Apart from that reformations need to be there both in terms of work process and
in terms of the pay structure of the officials to correct this . This requires a lot of time and
hence practically, matching its living standard with that of the UK by the year 2030 is
impossible.
Apart from that, another important factor is the education and the structure of the economy.
The economy of India is still dependant mainly on the agricultural activities. Most citizen of
the country is based in the rural areas and makes ends meet from the agricultural field
(Chatterjee and Kar 2018). This not only reduces the pace of the growth of the economy, but
it also lowers the requirement of education. The economy of India also has a problem of
unemployment and underemployment that can reduce efficiency of the growth in the coming