Can India do a China

Karan Avad F21016 IFDM-2, NICMAR Pune.

Introduction

Many Indian experts believe India will be the next superpower.

Experts predict Indias emancipation to become the next superpower from poverty, starvation, bribery and chronic lethargy First lets see Indias strengths and weakness in Economy -

Karan Avad (F21016 - IFDM2)

Strengths of Indian Economy

Favorable Demographics. Scope for increases in efficiency. Well placed to benefit from globalization and outsourcing. Positive Growth Forecasts

Karan Avad (F21016 - IFDM2)

Problems Indian Economy is Facing?

Inflation. (7-8%) Poor educational standards. Poor Infrastructure. Balance of Payments deterioration. High levels of debt Inequality has risen rather than decreased.

Large Budget Deficit.

Rigid labor Laws.
Karan Avad (F21016 - IFDM2)

India vs China: Experts Arguments

Education:

For every university graduate in China, India has six.

Democratic form of government:

In the long run, democracy is economically successful form of government than Authoritarian

Rule of law:

The rule of law creates predictability and stability that allows entrepreneurial behaviour to flourish.
Karan Avad (F21016 - IFDM2)

India vs. China: Critiques Arguments

Education:

China is quite close to complete literacy, especially among the youth, while India is still 30% illiterate. It is an illusion that economic success requires political liberalization. Chinas autocratic regime is sustaining growth for last 30 years which cannot be termed as a short term achievement low tax regimes and significant economic growth are more popular with masses even if it is not a democracy We cannot deny the deep-rooted corruption that exists in India everywhere.
Karan Avad (F21016 - IFDM2)

Democratic form of Government:

Rule of Law:

India vs. China: GDP

The Indian economy opened up 20 years after Chinas and that may explains where it stands today in comparison to India. Indias GDP has been roughly 6% since 1980. But when we say that we will take over China it does not imply that China will wait for us to catch up. Chinas GDP has been growing at an average rate of close to 10% p.a for the last 30 years. On a purchasing power parity (PPP) basis, it is already the second largest economy in the world.

Karan Avad (F21016 - IFDM2)

Conclusion
Instead of obsessing over when we will take over China, we should try and learn from The China Model. Like China, we should acknowledge our weaknesses and try and identify strategies to overcome them Most of our economy is still dependent on agriculture and yet it remains majorly inefficient. Our government spends huge amount of money subsidizing agriculture rather than investing in vital infrastructure. Economic reforms and better infrastructure could 8 turn the tide in our favour. Karan Avad (F21016 - IFDM2)