After ruling for around 150 years, the British left India in August 1947. But before leaving, they also divided the subcontinent into two. The two countries—India and Pakistan—inherited similar economies, marked by neglect and under-investment from their past colonisers. However, 77 years later, the difference between both couldn’t be starker—while India is poised to become the third-largest economy in the world, Pakistan is facing economic and political instability and struggling to stay afloat.
According to the World Bank, India’s GDP stood at $3.39 trillion as of 2022, more than 800 percent greater than the $376.53 billion GDP of Pakistan.
Another indicator to look at is the GDP per capita of both countries. While the two countries started out with nearly identical figures, India’s GDP per capita is nearly 50 percent more than that of Pakistan’s today.
However, there were times before 2000 when Pakistan’s GDP per capita was actually higher than India's. Such a trend can also be seen when it comes to GDP growth, which remained higher than India for many years before the 1990s.
While protectionist policies by the Indian government slowed growth, Pakistan benefited immensely by the trade from East Pakistan, which accounted for as much as 70 percent of the country’s export earnings during its early years.
Billions of dollars in foreign aid given by the US, and West Asian countries also accelerated the growth of the Pakistani economy during the period. However, this also led to the country’s over-dependency on foreign aid and delayed reforms of its economy. And after the 1971 war—Pakistan also lost its crown jewel, East Pakistan (which was subsequently renamed Bangladesh).
Meanwhile, India’s economic progress was much less dependent on foreign aid, and the liberalisation of its economy in 1991 allowed the country to receive more investments, accelerating growth.
The divergence of both economies also becomes apparent when observing the total reserves held by them over the years. From being nearly the same till 1975, India’s total reserves have crossed $567 billion, while Pakistan’s stands at $9.93 billion.
When it comes to the living standards of its people, the latest data from both countries show that the percentage of people below the national poverty line stands at 21.9 percent. However, more recent data on other contours of growth shows that India has gone ahead.
Only 56.2 percent of people in India had access to electricity in 1998, while around 70.5 percent of people in Pakistan had access to the same. But by 2021, as much as 99.6 percent of Indians have access to electricity, while in Pakistan this figure stands at 94.9.
Cross-border tension
India and Pakistan’s infant mortality rates in 1960 stood at 161.9 and 184.9, respectively. By 2021, India has managed to bring down its figure to 25.5, while Pakistan’s remains comparatively higher at 52.8.
A major factor behind the abysmal growth in Pakistan’s economy since the 1970s is the constant political instability in the country. Since its creation, the country has never had a Prime Minister that has completed a full term in power. Moreover, including the constitutional coup of 1953, Pakistan has seen as many as 4 coups and several more coup attempts—spending decades under non-democratic military rule.
Meanwhile, except for the 1975-77 Emergency period, India has remained a politically stable democracy throughout its history post-independence.
Terrorism has also been a thorn in Pakistan’s post-independence history. The country ranked fourth for the most number of fatalities from terrorism in 2022, accounting for as much as 10 percent of the deaths from terrorism globally, according to Global Terrorism Index 2023.
While Pakistan was among the countries that saw the most increase in deaths from terrorism during the year, India was ranked eighth among countries that saw the most decline for the same.
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