The Congress on Wednesday said that the World Bank’s report released earlier in the day that has declared India the third largest economy in the world was a “testimony to the work of Prime Minister Manmohan Singh”.

“A lot has been said about the economy, but I want to inform you that India has been declared the third biggest economy in the world replacing Japan,” Congress spokesperson Shakeel Ahmed told reporters.

He was responding to questions if the fear of anti-incumbency was the reason for the cut down in the already limited Lok Sabha elections campaign plan of Dr. Singh. The PM recently cancelled his rallies originally scheduled in his home state of Punjab and also in Gujarat where he was expected to take on the BJP’s prime ministerial candidate Narendra Modi.

Purchasing power

“The United States remained the world’s largest economy, but it was closely followed by China when measured using PPPs [Purchasing Power Parity]. India was now the world's third largest economy, moving ahead of Japan,” said the 2011 International Comparison Program (ICP), which involves the World Bank on Wednesday. The study assesses economies based on PPP or an estimate of the comparable real living costs across countries (by factoring in the differences in price levels and the exchange rates).

On per capita Gross Domestic Product (GDP), however, India ranked 129th among 177 nations in PPP terms. India’s per capita GDP, according to the World Bank report, was $4,735 in 2011.

The report puts China's GDP at 87 per cent of that of the United States in 2011 and says that the Chinese and Indian economies have more than doubled relative to that of the US since the study was last undertaken. The 2005 version of the study had said that the Chinese economy was less than half the size of that of the US. India’s GDP on PPP basis, according to the ICP report, was $5.75 trillion in 2011. Japan’s, in comparison was $4.37 trillion.

The 2005 ICP report had, however, ranked India as the 10th largest economy with a PPP GDP of $2.34 trillion. Japan even then was ranked third with a GDP of $3.87 trillion.

The report comes after an International Monetary Fund report in 2011 had valued India’s GDP in PPP terms at $4.46 trillion and put India slightly ahead of Japan ($4.44 trillion).

'India is now

the world's third largest economy, moving ahead

of Japan'