A social media post accompanying a news clip of Jansatta stating that the World Bank has stripped India of the developing country tag and now that India will be placed alongside countries like Pakistan, Zambia and Ghana is being widely circulated. Criticizing the Modi government, the clip is being shared as a recent one. Through this article let’s fact-check the claim made in the post.
Claim: News clip stating World Bank has removed the developing nation tag of India.
Fact: This is an old news which dates back to 2016, when the World Bank changed the nomenclature of classification of countries. World Bank stopped categorising countries as developed and developing countries. Instead World Bank started grouping countries based on the per capita income into Low Income Economies, Lower Middle Income Economies, Upper Middle Income Economies, and High Income Economies. India with per capita income of $1920 is placed under the Lower Middle Income Economies for the fiscal year 2022. This old report is misconstrued as recent. Hence the claim made in the post is MISLEADING.
This is an old clip that dates back to 2016. Google search with relevant keywords yielded the same news report published by the Jansatta on 05 June 2016. However, as per the article, the change in category is because of the World Bank’s change in classification of the economies.
Until then India was considered a developing nation, as World Bank used to place low and middle-income countries under the category of developing countries. However, World Bank has started micro categorization, based on the per capita income of the countries, and thus stopped placing low and middle-income countries under the developing countries category.
As per the Economic Times article, dated 31 May 2016, World Bank has stopped distinguishing countries as ‘developing’ and ‘developed’ countries. And ‘with economies becoming less and less homogeneous, the multilateral agency will group countries based on geographical coverage and income levels to capture the changing world’, the article reported.
World Bank, in its World Development Report, 2016, has stopped using the categorisation of ‘developing’ and ‘developed’ countries and started grouping countries into Low Income Economies, Lower Middle Income Economies, Upper Middle Income Economies, and High Income Economies based on per capita income of the countries.
‘Low-income economies are those with a GNI per capita of $1,045 or less in 2014. Lower middle-income economies are those with a GNI per capita of $1,046–$4,125. Upper middle-income economies are those with a GNI per capita of $4,126–$12,735. High-income economies are those with a GNI per capita of $12,736 or more’.
For the current 2022 fiscal year, there is no change in the benchmark for low-income countries, whereas there is a slight decrease in per capita benchmarks for the remaining classifications. India with a per capita GNI of $1920 is placed under the Lower Middle Income Economies.
To sum it up, the news report stating World Bank stripped India of the tag of a developing country is from 2016 when it changed the definition governing the classification of economies.
