DEVELOPMENT EXPERIENCES OF INDIA: A COMPARISON

WITH NEIGHBOURS
KRISHNAKUMAR C S
PGT ECONOMICS
DAV-BHEL SCHOOL, RANIPET
REGIONAL ECONOMIC GROUPS
• Economic and regional groups like
SAARC, European Union, ASEAN, G – 8,
G – 20, BRICS have been formed to
promote international trade.
• They promote economic co-operation
among member countries.
• They are also aimed at strengthening the
economies of member countries.
 Steps taken by Nations for their
economic progress
• Formation of Economic and Regional Groups like
SAARC, European Union, ASEAN, G – 8,
G – 20, BRICS etc.
• Promote international co-operation.
• Promote foreign trade.
• Analyse the development strategy of
neighbours.
• Evaluate their own strengths and
weakness and decide policies.
• Liberalisation
• Globalisation
• Similarities in developmental strategies of India,
Pakistan and China
• All the three countries started their journey
towards development at the same time. India
and Pakistan got freedom in 1947. Communist
Party came to power in China in 1949.
• All the three countries adopted Economic
Planning to achieve development.
• India and Pakistan adopted Mixed Economy.
China adopted a Socialist system.
• Public sector is give greater role in the
economies of all the three countries.
• Till 1980, all the three countries had similar
economic growth rates and per-capita incomes.
• All the three adopted liberalisation, privatisation
and globalisation in order to achieve faster
economic development
PEOPLE’S REPUBLIC OF CHINA
 CHINA
• People’s Republic of China was established in 1949.
• China went under one party rule.
• China adopted Socialism as its economic system.
• All important sectors, enterprises, lands were
brought under Government control.
GREAT LEAP FORWARD
 The Great Leap Forward (GLF)
• This campaign was started in 1958.
• It aimed at industrialising the
country on a large scale.
• People were encouraged to set up
industries in their backyards.
• In rural areas, communes were
started.
• Under the Commune system,
people collectively cultivated lands.
• In 1958, there were 26,000
 • Problems faced by GLF campaign
• A severe drought caused damages in China 30
million people lost their lives.
• Conflicts started between Russia and China.
• Russsia withdrew its professionals who had earlier
been sent to China to help in the industrialisation
process.
• In 1965, Mao introduced the Great Proletarian
Cultural Revolution (1966–76) under which
students and professionals were sent to work and
learn from the countryside.
ECONOMIC REFORMS IN CHINA
 • Economic Reforms
• In 1978, China introduced Economic Reforms.
• Reforms resulted in rapid industrial and economic
development.
• Economic reforms were introduced in phases.
• In the first phase, reforms were introduced in
agriculture, foreign trade and investment
sectors.
• In the later phase, reforms were introduced in
the industrial sector.
 • Reforms in Agriculture in China
• Commune lands were divided into small plots.
These lands were given to individual families to
cultivate.
• Farmers were allowed to keep all income from
the land after paying taxes.
 Reforms in Industrial Sector
• Private sector was allowed to produce industrial
goods.
• Villages enterprises owned by local collectives were
promoted.
• State owned enterprises were made to compete
with private firms.
• Dual pricing was introduced. 50% of agricultural
and industrial goods had to be bought and sold at
the Government fixed prices. Remaining could be
bought and sold at the market fixed prices.
• Special Economic Zones were set up to attract
foreign investment.
PAKISTAN
 • PAKISTAN
• Pakistan follows mixed economy.
• Late 1950s and 1960s, Pakistan introduced
regulated policy framework (for import
substitution-based industrialisation).
• Tariff protection was introduced.
• Restrictions on imports like quota and licensing
were introduced.
• Green Revolution resulted in increased agricultural
output.
• In 1970’s capital goods industries were nationalised.
• In late 1970’s and 1980’s there was a major policy
change. De-nationalisation and encouragement of
private sector started.
• Pakistan received financial support from western
countries.
• Remittances from Pakistanis working in middle east
also helped in economic growth.
• In 1988, economic reforms were introduced.
DEMOGRAPHIC COMPARISON OF INDIA,
PAKISTAN AND CHINA
 COMPARISON OF DEMOGRAPHIC SITUATION
• Out of every six persons living in this world,
one is an Indian and another a Chinese.
• The population of Pakistan is very small and
accounts for roughly about one-tenth of China
or India.
• One child norm introduced in China in the late
1970s is the major reason for low population
growth.
• One child norm led to a decline in the sex ratio.
• One child norm and the fall in the growth of
population have other implications.
• For instance, after a few decades, in China,
there will be more elderly people in proportion
to young people.
• This led China to allow couples to have two
children.
COMPARISON OF GDP AND CONTRIBUTION OF
EACH SECTOR TO GDP
 • GROSS DOMESTIC PRODUCT AND
SECTORS
• China has the second largest GDP (PPP) of $22.5
trillion in the world.
• India’s GDP (PPP) is $9.03 trillion.
• Pakistan’s GDP is $ 0.94 trillion, roughly about 11
per cent of India’s GDP.
• India’s GDP is about 41 per cent of China’s GDP.
• Reform processes introduced in Pakistan and
political instability over a long period are the
reasons behind the declining growth rate in
Pakistan.
• Area suitable agriculture in China is just 10% of its
total land.
• China’s agricultural land is just 40% of India’s
agricultural area.
• Till 1980, nealy 80% of China’s population was
engaged in agriculture.
• The Government encouraged farmers to shift to
other occupations like handicrafts, trade and
transport.
• 2018 – 19 only 27% of its population was in
agriculture.
• In all the three countries the service sector is
emerging as a major player of development. It
contributes more to GVA and, at the same time,
emerges as a prospective employer
COMPARISON OF HUMAN DEVELOPMENT
Factors that are not included while
calculating HDI
• ‘People’s participation in social and
political decision-making’
• ‘Liberty indicators’ like Constitutional
protection given to rights of citizens’ or
Independence of the Judiciary and the
Rule of Law’ have not even been
introduce.
• In the above factors India stands ahead
 Why did China introduce structural reforms
in 1978?
• Slow economic growth
• Lack of modernisation
• Maoist vision of economic development based
on decentralisation, self sufficiency and
rejection of foreign technology, goods and
capital had failed.
• Despite extensive land reforms, collectivisation,
the Great Leap Forward and other initiatives,
the per capita grain output in 1978 was the
same as it was in the mid-1950s.
 Reforms benefited China in the following
ways:
• Development of educational and health
infrastructure, land reforms, decentralised
planning and the development of small
enterprises resulted in rapid economic
growth.
• Reforms were introduced in smaller level
and then extended on a massive scale.
• Distribution of commune lands to
 Pakistan and Economic Reforms
• Growth rate of GDP and the contribution of all the
three sectors to GDP decreased in Pakistan after
the Economic Reforms were introduced.
• Poverty also started increasing in Pakistan in the
recent period.
• Increase in agricultural output was due to good
harvest not because of technological and
institutional changes. Food scarcity emerged during
the periods of bad harvest.
• Pakistan has taken huge amounts as loans from IMF
and World Bank. Repayment of loans is a heavy
burden on the economy.
 • Recent developments in Pakistan
• In the last few years, Pakistan started making
progress.
• GDP growth rate increased to 5.5% in 2017 - 18
• Industrial sector grew at the rate of 4.9.
• Service sector grew at the rate of 6.2 %.
 • INDIA
• India’s performance in economic
development has been moderate.
• Lack of sufficient infrastructure has been
a factor that prevents India’s growth.
• One-fourth of the population is still
living under poverty line.
• India guarantees democratic rights and
freedoms to her citizens.
 • PAKISTAN
• Following factors are responsible for poor
performance of Pakistan:
• Political Instability
• Over dependence on foreign aid and remittances
from abroad.
• Poor condition of agriculture.
• However, in the recent years, Pakistan has shown
better growth rate.
 CHINA
• In China lack of political freedom and violation of
human rights are serious issues.
• Economic reforms helped them to achieve raipd
economic growth rate.
• Reforms under a committed Government also
resulted in the reduction of poverty.
• They maintained collective ownership of land and
at the same time allowed individual families to
cultivate.
• Government introduced several social security
measures to improve the living standard of the
people.