Lexi Webster
Australia and India are two very different countries in terms of development. While Australia is often described as a peaceful and developed nation with a high quality of life, India is still a developing country with a large wealth gap and a much higher population. India's total wealth exceeds that of Australia, ranking it as the sixth wealthiest country in the world, while Australia ranks ninth. However, when it comes to per capita income, Australia takes the lead due to its significantly lower population. This highlights the impact of population size on a country's development and the standard of living experienced by its citizens.
| Characteristics | Values |
|---|---|
| Population | Australia: 2.3 crore India: 121 crore |
| Per capita income rank | Australia: 5th India: 142nd |
| GDP rank | Australia: 10th India: N/A |
| Total wealth | Australia: $6,142 billion India: $8,230 billion |
| High net-worth individuals | Australia: N/A India: 330,400 |
| Poverty rate | Australia: N/A India: 32.7% |
| Currency | Australia: Australian dollar India: Indian rupee |
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What You'll Learn
Population size and its impact on development
Population size has a significant impact on a country's development, and this relationship is complex and multifaceted. Demographic changes due to population growth can influence economic growth, environmental sustainability, agricultural practices, and resource availability.
Firstly, population growth is closely linked to economic growth. An increasing population can lead to a larger workforce, which can spur innovation and contribute to economic development. This relationship is particularly evident in high-income countries, where higher population growth may be beneficial and can counter declining population growth rates. However, this relationship is not linear and may follow an inverted U-shaped curve. Initially, population growth can positively impact economic development, but this effect may decrease over time and eventually turn negative. This dynamic is influenced by demographic transitions, such as changes in fertility and mortality rates.
Secondly, population size has implications for environmental sustainability. High-income nations with larger populations tend to have higher per capita resource consumption, including energy, water, and raw materials. This high per capita resource use can strain limited global resources and contribute to environmental issues. For example, population growth increases food demand, putting pressure on land, water, and energy resources. It can also lead to increased use of chemical fertilizers and pesticides, resulting in soil deterioration and negative impacts on biodiversity. Additionally, changing consumption patterns associated with rising incomes and dietary shifts towards more resource-intensive foods contribute to environmental degradation and increased greenhouse gas emissions.
Moreover, population size can influence agricultural practices and food security. Population growth can lead to habitat loss and negatively affect biodiversity. However, sustainable agricultural techniques, such as using less hazardous chemicals and adopting ecosystem-supporting methods, can help mitigate these impacts. Governments can play a crucial role in prioritizing sustainable approaches to boost agricultural output and address food insecurity.
In summary, population size has far-reaching effects on various aspects of development. It influences economic growth, environmental sustainability, agricultural practices, and resource availability. While population growth can bring about economic benefits, it also poses challenges in terms of resource management and environmental conservation. Balancing these factors is essential for achieving sustainable development and ensuring the well-being of growing populations.
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India's higher GDP, but lower per capita income
India has a higher GDP than Australia, but a lower per capita income. India's economy is a developing mixed economy with a notable public sector in strategic sectors. It is the world's fourth-largest economy by nominal GDP and the third-largest by purchasing power parity (PPP). However, when it comes to per capita income, India ranks much lower, at 136th by GDP (nominal) and 119th by GDP (PPP).
In 2011, India's average annual per capita income was $1,410, placing it among the poorest of the world's middle-income countries. There are also sharp regional variations within India in terms of per capita income, with states like Maharashtra, Tamil Nadu, and Karnataka contributing significantly more to the national GDP than states like Uttar Pradesh and Bihar. These disparities in income levels are also reflected in literacy rates, life expectancy, and living conditions.
On the other hand, Australia ranked ninth on the list of the world's wealthiest countries, with a total wealth of $6,142 billion in 2018. While India's total wealth that year was $8,230 billion, making it the sixth wealthiest country globally. However, when it comes to per capita income, Australia likely has a higher ranking than India, given its smaller population and higher overall wealth.
The differences in per capita income between India and Australia can be attributed to various factors, including historical economic policies, regional variations, and socio-economic development within India. Despite India's higher GDP, its large population means that the wealth is distributed across a more significant number of people, resulting in a lower per capita income.
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Australia's higher per capita income and lower population
Australia has a much lower population than India, with 2.3 crore people compared to India's 121 crore people. This has a significant impact on the per capita income rankings of the two countries. While India has a higher GDP than Australia, its large population dilutes this wealth, resulting in a lower per capita income ranking of 142nd, in contrast to Australia's 5th position.
The higher per capita income in Australia translates to a higher standard of living for its citizens. In Australia, money is not the primary concern as it is in India, where there is intense competition for limited resources. The disparity in population sizes contributes to a significant difference in the availability of resources per person, impacting financial security and overall quality of life.
In Australia, the majority of people earn a decent wage, allowing them to meet their daily needs and maintain a comfortable standard of living. This financial security contributes to a sense of satisfaction and a more peaceful, civilized, and sophisticated society. The lower population density in Australia likely contributes to a more relaxed and secure environment, which may be a factor in the lower perceived importance of wealth accumulation.
In contrast, 32.7% of India's population lives below the international poverty line, amounting to approximately 40 crore people. The sheer number of people in India intensifies the competition for resources, including employment opportunities. This dynamic underscores the importance of wealth accumulation in Indian society, where the primary focus is often on earning and saving money to maintain a decent standard of living.
The population disparity between Australia and India highlights the challenges of resource distribution and the subsequent impact on per capita income and overall development. While India boasts a higher total GDP, its significantly larger population results in a lower per capita income ranking, influencing the daily experiences and priorities of its citizens.
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India's high number of high net-worth individuals
India has witnessed exponential growth in its population of high-net-worth individuals (HNWIs) and ultra-high-net-worth individuals (UHNWIs). HNWIs are defined as those with assets of over $1 million, while UHNWIs hold assets worth over $30 million. According to a 2018 report, India was home to 330,400 HNWIs, ranking it ninth in the world in this regard. More recently, in 2022, the number of HNWIs in India rose to 797,714, with expectations for further growth in the coming years. This growth is driven by new opportunities in sectors such as global manufacturing, infrastructure development, and technology startups, which contribute to the expansion of the country's wealthy class.
The increase in India's wealthy population is also reflected in its total wealth. According to the New World Wealth report in 2018, India's total wealth rose by 25% from $6,584 billion in 2016 to $8,230 billion in 2017, outperforming China's 22% wealth growth during the same period. This surge in wealth elevated India's ranking as the sixth wealthiest country in the world, surpassing countries like Australia, France, Canada, and Italy.
While India boasts a substantial number of HNWIs and UHNWIs, it also experiences a significant outflow of these individuals. Countries like the US, Dubai, and Singapore attract Indian HNWIs due to factors such as better business and lifestyle opportunities, and the availability of top-tier educational prospects for their children. This exodus of wealthy individuals raises questions about the distribution of wealth within India, as the top 1% of the population already holds 40% of the country's wealth, the second-highest skewed distribution globally after Brazil.
The growth in India's HNWI population has implications for the country's economy and society. The emergence of new wealth creation opportunities, particularly in sectors like technology and infrastructure development, contributes to the expansion of the wealthy class. At the same time, the concentration of wealth among a small percentage of the population highlights the income inequality prevalent in India. Private wealth managers and financial institutions play a crucial role in catering to the complex needs of HNWIs, offering specialized services in estate planning, tax planning, and investment diversification to help preserve their capital and maintain their financial objectives.
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India's higher unemployment rate
According to the India Employment Report 2024, the country's working population has been steadily increasing. It rose from 61% in 2011 to 64% in 2021 and is projected to reach 65% by 2036. However, the percentage of youth involved in economic activities declined to 37% in 2022, underscoring the pressing nature of the unemployment issue.
The unemployment rate in India is influenced by various factors, including economic conditions, urbanization trends, and inflationary pressures. When economic downturns occur and job opportunities become scarce, unemployment tends to rise. Conversely, during periods of economic growth and prosperity, when numerous job openings are available, the unemployment rate typically decreases.
India's urbanization and urban workforce have been on a downward trajectory since 2012, which may contribute to the unemployment challenge. Additionally, high inflation rates can erode consumers' purchasing power, leading to reduced demand for goods and services. This can trigger a cascade of effects on businesses, resulting in cost-cutting measures such as layoffs and hiring freezes, ultimately exacerbating unemployment levels.
The National Sample Survey Office (NSSO) plays a crucial role in studying employment and unemployment rates in India through its periodic labour force surveys. However, the NSSO has been criticized for its infrequent reporting, typically conducting surveys once every five years. The NSSO's latest survey, initiated in 2017-2018, indicated an "usual status" unemployment rate of 6.1%—a four-decade high potentially influenced by the 2016 demonetization of large banknotes aimed at curbing the informal economy.
While India's total wealth surpasses that of Australia, ranking it as the sixth wealthiest country globally, unemployment remains a pressing concern. India's unemployment rate, marked by fluctuations, has been estimated at 5.1% in April 2025 by the Periodic Labour Force Survey (PLFS). In contrast, Haryana, the state with the highest unemployment rate in India as of December 2022, reached 37.4%Odisha, the state with the lowest rate, stood at 0.9%. These disparities highlight the complex dynamics of unemployment within India.
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Frequently asked questions
It depends on how you define "developed". While India has a higher GDP than Australia, it has a much larger population, which means that its per capita income is lower. Australia has a smaller population, and its citizens face less financial hardship in their daily lives.
In Australia, citizens generally earn enough money to maintain a decent standard of living. In India, the competition for resources is stiff due to the country's large population, and many people live below the international poverty line.
According to a 2018 report by New World Wealth, India is the sixth wealthiest country in the world, while Australia ranks ninth. India's total wealth was $8,230 billion in 2017, compared to Australia's $6,142 billion.
India has a large population, which leads to challenges such as unemployment and poverty. There are also issues with the education system, as many people are illiterate despite the availability of schools.
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