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Indian Economy : A Comparative Overview with China

ARTI NANAVATI PROF. OF ECONOMICS DIRECTOR, CENTRE FOR CANADIAN STUDIES MAHARAJA SAYAJIRAO UNIVERSITY OF BARODA VADODARA- 390002 GUJARAT-INDIA DEPT. OF ECONOMICS, SIMON FRASER UNIVERSITY BURNABY, BC, CANADA 18 JUNE, 2009

Some General Facts


India is the worlds second most populous country of over 1 billion people

after China.

Urban population 28% of total. (China 39%) More than half of its population is 25 years of age. Demographic dividend.

Measured in USD exchange rate terms, 12th largest in the world, with a GDP

of $3.32 trillion (PPP) , China ranked 2nd largest with GDP of $7.8 trillion. (2008)

PCI $2,900 at PPP and that of China $6100 (2008) Population below poverty line is 27.5% (2008 est.) China 10% World Bank classifies India as a low income economy

The contribution of Agriculture, industrial and service sector (2007-8) in GDP has been 21,24 and 55%. ( In China the corresponding percentages are 11.3, 48.6 and 40 % in GDP 2008)
Agriculture is the predominant occupation in India, accounting for about 60% of employment ( China 43%) . The service sector makes up a further 28% (China 32%) , and industrial sector around 12% (China 25%). Organized sector employs 8% of workforce (two thirds of which are in public sector), and produces about 40% of GDP. Rest in informal sector -with predominance of women. Urban informal sector is a fast growing sector. 30% of total labour is constituted by casual labour and only 10% are in regular employment. Major problem not of open unemployment but of underemployment and disguised unemployment. Unemployment rate 6.8% (2008 est., in China 4.3% is official and 17% unofficial UR).

Why India?
GDP growth rate 9% in 2007-2008, slowed down to 7.3% in 2008-9. Major industries are Textiles, chemicals, food processing, steel,

transportation equipment, cement, mining, petroleum, machinery, software. economy. India is an imp. back office destination for global outsourcing of customer services and technical support. software eng.

Services are a growing sector and play an important role in Indian

Major exporter of highly skilled workers in financial, software,

Potentials are in , manufacturing, pharmaceuticals, biotechnology,

nanotechnology, telecommunication, shipbuilding, aviation, tourism and retailing.

Composition of Indias GDP


(at Factor Cost by Economic Activity at 1999-2000 prices, in%)

2000-01
1)Agriculture etc 2)Industry 2.1 Manufacturing 2.2 Construction 3) Services 3.1 Trade, hotel, Restaurants 3.2 Transport, storage & communica. 3.2 Finance, insurance, etc 3.3 Community, social and per. service
Source: EPW June 14, 2008

2007-08
20.55 24.71* 54.74 26.80** 14.32 13.62

23.89 25.80 15.30 05.81 50.30 14.34 07.96 13.04 14.98

* Inclusive of2.1, 2.2, ** of 3.2. Source : EPW 14TH June , 2008 and Economic Survey of India 2007-8

India- Structural Transformation-?


Economic policy: Approach

i) Since independence (1947) till almost late eighties followed a socialist inspired approach- strict govt. control over -private sector participation, foreign trade and FDI (Approach-import substituting rather than export promoting) . ii) Indias low average growth rate ( 3%) from 1947-80 was referred as Hindu rate of growth, because of the unfavorable comparison with the other Asia countries, especially the East Asian Tigers.

A period of import tariff, export taxes, quantitative

restrictions , approvals needed for 60% of new FDI in the industrial sector.

FDI averaged only $200M between 1985-1991. In 2004, net FDI inflow was about 7-8 USD bn. (

China, 52 USD bn)

A large percentage of the capital flows consisted of

foreign aid, commercial borrowing and deposits of non resident Indians. markets.

Largely and intentionally isolated from world

Late eighties: the govt. led by Rajiv Gandhi eased restrictions

on capacity expansion for incumbents, removed price control and reduced corporate taxes. Phase of high growth with high fiscal deficit and worsening current account Collapse of soviet union a major trading partner, first Gulf war causing spike in oil prices led to major balance of payment crisis with the prospects of defaulting on its loan. Prime Minister Narasimha Rao with Finance Minister Manmohan Singh initiated the economic liberalization of 1991. Reforms did away with license Raj in investment, industrial and import licensing-ended many public monopolies, introduced automatic approvals of FDI in many sectors.

Agriculture
India ranks second world wide in farm output. In 2007, accounted for 17% in GDP employing 60% of the total workforce. After having growth rate of 2% for many years- now the growth rate is about

4.5%.

Two thirds of Indias workforce still earn their livelihood directly or

indirectly through agriculture. High level of disguised unemployment.

Despite improvements, average yield in India ranges from 30-50% of the

highest average yield in the world. Major agricultural products include rice, wheat, oilseed, cotton jute, tea, sugarcane, potatoes, cattle, water buffalo, sheep goats, poultry and fish. India is the largest producer in the world of milk cashew nuts coconuts tea, gingerturmericand black pepper.It also has the world's largest cattle population (193 million).
It is the second largest producer of wheat rice sugar groundnutand inland

fishIt is the third largest producer of tobacco India accounts for 10% of the world fruit production with first rank in the production of banana and sapota.

Industry
India ranks 14th in the world in factory output. Industry accounts for 27.6% of the GDP and employs 17% of the

work force.

Manufacturing growth rate 8.4%. high-skill sectors account for almost 40 percent of the manufacturing

output of India.

Textile manufacturing is the second largest source for employment

after agriculture and accounts for 26% of manufacturing output One third of industrial labour force is engaged in simple household manufacturing only.
Economic reforms led to more private sector participation, an

expansion in the production of consumer goods and both domestic and foreign competition.

Services
India is fifteenth in services output. With largest share in GDP of 55%, it employs 23% of workforce. The growth rate which was 4.5% in 1951-80 increased to 7.5% in 1991-

2000. Recent growth rate 10.7%.

Fastest growing services are business services, information

technology enabled services, business process outsourcing contributing about one third of total output of services in 2000. only about 1% of total GDP and 1/50th of the total services.

Indias IT industry an important contributor to BOP, accounts for

India leads the market in offshored back-office services, but as a

manufacturing center it lags behind China, Thailand, and the rest of Asia.

External Sector
Exports

$175.7 billion f.o.b (2008 est.)

Export goods petroleum products, textile goods, gems and

jewelry, engineering goods, chemicals, leather manufactures


Main export partners Imports Import goods Main import partners

US 15%, the People's Republic of China 8.7%, UAE 8.7%, UK 4.4% (2007) $287.5 billion f.o.b. (2008 est.) crude oil, machinery, gems, fertilizer, chemicals People's Republic of China 10.6%, US 7.8%, Germany 4.4%, Singapore 4.4%

Almost stagnant export for the first 15 years after independence.

Dominated by products like tea, jute and cotton manufacturers having generally inelastic demand.

Since liberalization ex-im have become much broad based. Indias exports are consistently rising, covering about 80% of its imports. Merchandise trade of India about 31% of GDP in 2007 (China 68%) High technology exports as % of total manufacturing exports are 5% in

case of India and 30% in case of China. 0.1% in 1990

FDI in India has reached 2% of GDP (China 3%, 2006), compared with

The top five countries in FDI inflows (2000-2007) are Mauritius

(44%),United States(9.4%), UK( 8%), Netherlands(6%)and Singapore(5%).

Sectoral Employment Share by Current Daily Status


Industry Division Agriculture and allied activities Mining & Quarrying 1993-4 61.03 0.78 2004-5 52.06 0.63

Manufacturing
Electricity, gas and water supply Construction Trade , hotels and restaurants Transport, Storage & communication Finance, insurance, real estate and business services

11.10
0.41 3.63 8.26 3.22 1.08

12.90
0.35 5.57 12.62 4.61 2.00

Social, community and personal services


Source: Economic Survey of India 2007-08

10.50

9.24

Economically Active Adult population (%) 2004-2005


1993 2005 ----------------------------------------------------------------------------------------------Agriculture 74.8 68.5 Labour Cultivator Farm regular 34.4 39.3 1.1 30.3 37.3 0.9

Non Farm Sector 25.2 31.5 Casual 6.3 7.3 Regular 7.0 9.3 Self employed 11.9 14.9 ----------------------------------------------------------------------------------------------100 100
Source: NSSO, 62th Round

Structure of Employment
Proportion of workers in the workforce (2005-06) Proportion of workers in the workforce (2005-06)

Self-employed Self-employed 55.0% 55.0% Workers Workers 45.0% 45.0%

Growth of working class

Worker population (in millions)

250 194.10 200 142.26 150 100 50 0 1987-88 1993-94 2001-02 168.69

206.39

2005-06

Rural workers
Workers in the countryside have also increased in numbers. There were 144 million rural workers in 2005-06. There is a high proportion of casualisation in rural areas.
Rural workers (in millions)

150.0 100.0 83.06 50.0 19.45 0.0 1987-88 1993-94 Regular 2001-02 Casual 2005-06 18.39 20.32 27.46 103.20 114.85

116.54

Urban workers
There were nearly 63 million urban workers in 2005-06.

Proportion of regular workers is more among urban workers when compared to rural areas
Urban workers (in millions)

70 60 50 40 30 20 10 0

18.06 11.72 28.03 14.98 32.11 40.87

17.24

45.16

1987-88

1993-94 Regular

2001-02 Casual

2005-06

Wages
Wage rates defer between rural and urban areas and between males and females

Working age population


A big majority of Indias population is in the

working age group. Share of working age population (15-59) will increase from 58% in 2001 to 63% in 2011.
In 2005-06, about 60% of the population was in the

working age group. Of the working age group population, roughly 460 million people were in the workforce in 2005-06.
Of these about 206 million (45%) were

regular/casual workers.

Youth workers
India has among the largest number of youth

workers in the world.

In 2005-06, in the 15-34 age group there were 390

million youth (35% of population)

Of these 40.4% were engaged in gainful activity

i.e, nearly 160 million.

Nearly half of them were workers.

Rate of growth of employment in Organized Sector (% per annum)

1983-1994

1994-2005

Public Sector Private Sector


Total Organized

1.53 0.44
1.20

-0.70 0.58
-0.31

Source: Eleventh Plan Document.

Public-Private organized sector


Total no. of public and private sector workers stagnated between

1991-2001 and slightly decreased in recent times.

Employment in organised sector (in millions)


Source: DGET

30 25 20 15 10 5 0 1981 1991 Year Public Private 2001 2004

Public sector workers

Public sector workers by Industry - 2004


Agriculture Mining Manufacturing Electricity, gas, water Construction Community, social services Financing, insurance Trade, restaurants Transport, storage

Private sector workers


Private sector workers by Industry - 2004
Community, social services Transport, storage Financing, insurance Mining Agriculture

Trade, restaurants Construction Electricity, gas, water Manufacturing

Is development inclusive?

Labour Market
Growing employment but poor in qualitative terms with low regular

employment, underemployment and mismatch between education and employment. and condemned to low wages. In non-agriculture sector growth in employment is in informal sector.

A huge section of the working class lives in rural areas, is unskilled

Even in the urban areas there is a high degree of casualisation,

contract labour working in deplorable conditions with no security of work.

Although regular employment has risen, its growth has been almost

exclusively in the smaller, least productive enterprises.


About 87% of manufacturing employment taking place in micro

enterprises(<10 persons) producing just a third of manufacturing output.

Employment in firms with more than ten employees

accounts for only around 3.75 per cent of total employment (one quarter of regular employment) and has been falling. Indeed, India has a much smaller proportion of employment in enterprises with ten or more employees than any OECD country.
70% of Indians(800million), lived on less than 20 rupees(

slightly less than C50 cents) per day with most working in informal sector with no social security. (2007 Report on National Commission for Enterprises in the unorganized sector)

Sex Ratio in Population with Rural-Urban break up

Year
1901

1911 1921 1931 1941 1951 1961 1971 1981 1991 2001

Sex Ratio Rural Urban Total 979 910 972 975 872 964 970 846 955 966 838 950 965 831 945 965 860 946 963 845 941 949 858 930 951 879 934 938 894 927 946 901 933

Source : Office of the Registrar General, India


Sex Ratio 1901-91 (Total, Rural and Urban) from Brief Analysis of PCA paper-2 of 1992 1961 Population from PCA 1961 1971 Population from Social and Cultural Tables 1981 figures from Series Part-II A(I), General Population Tables Census of India 1981. Figures of 1991 (including interpolated data for JK-1991 based on 2001 census) and 2001 from PCA census of India -2001

Trends in Gender Disparity in Literacy Rate


Male Female Male/Female Literacy rate disparity Slightly more than half of total women are literate. Male-Female LR disparity is on decline.

Year

1961 1971 1981 1991 2001

40.4 39.5 56.3 63.8 75.8

15.3 18.4 29.7 39.4 54.1

0.45 0.38 0.35 0.28 0.21

Area and Gender based Labor and Work Force Participation Rate (%)
Labor force participation rates 1993-94 Rural male 53.4 2004-05 53.1 Work force participation rates 1993-94 50.4 2004-05 48.8

Rural female 23.2


Urban male 53.2

23.7
56.1 15.0

21.9
49.6 12.0

21.6
51.9 13.3

Urban female 13.2

Source: Economic Survey of India: 2007-08

Area and Gender based Structure of Employment 2004-2005

Particulars

Rural Male Female 56% 57% 31% 62%

Urban Male Female 57% 42% 15% 44%

Labour Force
Self empl. Regular Wage and Salaried Unempl. Rate

10%

4%

42%

40%

3%

2%

5%

8%

Source: NSSO 62 Round

Gender based Distribution of Occupation in Rural India (%) 2004


Sector Male Female ------------------------------------------------------------------------------------------------------Agriculture 54.7 30.4 Casual 21.8 15.5 Cultivators 31.8 14.7 Regular 1.1 0.2 Non Farm 31.3 7.7 Casual 9.6 2.0 Self empl. 14.4 4.1 Regular 7.3 1.6 ------------------------------------------------------------------------------------------------------------Total 86.0 38.1 ------------------------------------------------------------------------------------------------------------Not working 14.3 62.0 ------------------------------------------------------------------------------------------------------------Casual 31.4 17.5 Self emp/cultivators 46.2 18.8 Regular 8.4 1.4
---------------------------------------------------------------------------------------------------------------

Share of women employment out of total employment in organized sector in India Year % of women in Public sector % of women in Private sector % of women in Total

1995 2000 2001 2002 2003 2004 2005

13.4 14.8 14.9 15.4 15.6 15.9 16.2

20.2 23.9 24.2 24.3 24.5 24.8 24.8

15.4 17.6 17.8 18.1 18.4 18.7 18.9

Source : Quarterly Employment Review, Directorate General of Employment & Training, Ministry of Labor

Women wage lower than men by 33-40 points.

Women-men wage differential is 0.75:1.

The gender based wage differential though has

narrowed down with increase in education level. It is still high.

Urban wage differential persists but narrower than

in rural area.

INDIA AND CHINA

2007 GDP (current US$billion) GNP PC (current US$)

India
1176.9 950 9.1%

China
3205.5 2370.0 13%

GDP growth Annual %


Population growth rate (annual %) Mobile and cellular subscription Per ooo population Internet user per 000 population

1.3 21 7

0.6 42 16

Source: World Bank: World Development Indicators: Country Profile April 2009

Situating India and China in World Trade (2007) Particulars Unit China India

Share in Merchandise
Exports Imports (%) Rank (%) Rank 8.71 2 6.70 3 1.05 26 1.52 18

Share in Commercial Services Exports Imports (%) Rank (%) Rank 3.63 7 4.14 6 2.74 10 2.49 13

Source: WTO- World Trade Statistics, April 2009

China India world Trade highlights 2007


Particulars China India

Exports of good & services % of GDP Imports of goods & services % to GDP Trade per capita ($US, 2005-07) Patents granted

42 32

21 24

1483 67948

391 4320

China- Merchandise Trade 2007


Breakdown in economy's in By main commodity group (ITS) (%) 1.Agricultural products 2.Fuels and mining products 3.Manufactures: By main destination 1 European Union (27) 2. United States 3. Hong Kong, China 4. Japan 5. Korea, Republic of 20.1 19.1 15.1 8.4 4.6 3.2 3.4 93.2 By main origin 1. Japan 2. European Union (27) 3. Korea, Rep. of 4. Taipei,Chinese 5. China 14.0 11.6 10.9 10.6 9.0 (%) 6.8 22.0 70.9 total exports: total imports

Indias- Merchandise Trade 2007


Breakdown in economy's in total exports: total imports --------------------------------------------------------------------------------------------------------------------------By main commodity group (ITS) (%) (%)

1.Agricultural products 2.Fuels and mining products 3.Manufactures:


By main destination 1 European Union (27) 2. United States 3. United Arab Emirates 4. China 5. Singapore

11.0 24.3 63.6


By main origin 21.7 13.8 9.9 6.5 4.4 1. European Union (27) 2. China 3. Saudi Arabia 4. USA 5. United Arab Emi.

4.4 40.2 46.3

14.8 11.2 7.6 6.5 5.4

Trade in Commercial Services-2007


Breakdown in economy's total exports (%) total imports (%)

China: 1. Transportation 2. Travel 3. Other commercial services India: 1. Transportation 2. Travel 3. Other commercial services

25.7 30.6 43.6

33.5 23.0 43.5

9.7 12.1 78.2

40.1 11.3 48.6

Cross Country Comparison


Share of Manufacturing Sector (2004)
45.00 39.41

40.00

35.00 31.40 30.00 28.34 24.07 28.74

Share in GDP

25.00

24.00

20.00 16.10 15.00

10.00

5.00

0.00 Argentina Brazil India China Countries Indonesia Korea Malaysia

Composition of Manufacturing Sector Across Countries


100% 11.99 90% 11.00 7.82 3.80

80% 29.60 28.06 70% 34.75 38.24

Share (Percentage)

60%

50% 32.35 40% 20.59 44.98 40.90 30% 13.27 20% 15.22 8.10 10% 12.37 0% CHN IND Countries Chemicals FBT Mach & Transp Others Textiles KOR MYS 20.39 9.50 8.24 8.83

Share (Percentage)
100.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00 0.00

1970 1971 1972 1973 1974 1975 1976 1977


China

1978 1979 1980 1981 1982 1983 1984 1985

Manufacturing Exports: Cross Country Comparison

Argentina Brazil

1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Years

India Korea Indonesia

Levels of Manufactured Exports Across Countries


542.20 500.00

400.00

US $Billion

300.00

233.99

200.00

100.00 52.19 9.94 0.00 Argentina Brazil China India Countries Indonesia Korea 55.05 40.55

95.80

Malaysia

Size of Labor Force in Manufacturing Sector


180.00 160.00 160.00

140.00

Number of Workers (Million)

120.00

100.00

80.00

60.00

53.06

40.00

20.00 1.36 0.00 Argentina

11.72

11.65 4.23 2.02 Malaysia

Brazil

China

India Countries

Indonesia

Korea

Spending on R & D as a percentage of GDP (2003)


3

2.5 2.5

R & D Expenditure as a Percentage of GDP

1.5 1.3

1.03 1 0.77 0.7

0.5

0.42 0.2

0 Argentina Brazil China India Countries Indonesia Korea Malaysia

HUMAN DEVELOPMENT INDICATORS(2006)


---------------------------------------------------------------------------------------------------------------------------Human Development Index ( Position among 179 countries) Particulars HDI Life expectancy at birth( yrs) Adult literacy rate (%) Combined(priter)enrolment ratio Rank 132 127 118 134 INDIA Value 0.609 64.1 65.2 61 Rank 94 69 53 113 CHINA Value 0.762 72.7 93 68.7

GDP PC($PPP) 126 2489 104 4682 ----------------------------------------------------------------------------------------------------------------------------

Source: Human Development Report 2008

HUMAN POVERTY INDEX (HPI-1) -2006

Particulars HPI-1 Probability of Not surviving to Age 40 (% of cohort) 2000-05 Adult Illiteracy Rate 1999-2001

India Rank Value(%) 87 28.5

Rank 35

China Value(%) 7.9

16.8

6.8

34.8

7.8
contd.

HUMAN POVERTY INDEX (HPI-1) -2006

Particulars Children Under Weight for age (% aged under 6, 2005-6) Population below Income Poverty line $1.25 a day $2 a day National poverty line HPI-1 rank minus income Poverty Rank

Rank

India Value(%)

Rank

China Value(%)

46

41.6 75.6
28.6

15.9 36.3
2.8

-11

-19

Source: Human Development Report-2008

Gender Related Development Index (GDI)


Particulars India China ----------------------------------------------------------------------------------------------------GDI Rank Value % of HDI Rank Value % of HDI 116 0.591 97.1 79 0.760 99.8 ------------------------------------------------------------------------------------------------------Life Expectancy At birth (2006) Adult literate (1999-2006) Combined gross Enrol. Ratio (%) 2006 Male 66.5 76.4 Female 97.1 53.4 Male 71.0 96.3 Female 74.5 89.5

63.3

57.4

68.9

68.5

Estimated Earned Income (PPP US$) 3698 1185 5646 3644 ------------------------------------------------------------------------------------------------------HDI rank minus GDI -1 1

Gender Empowerment Measure (GEM) 2007


Particulars India China GEM Rank 72 ---------------------------------------------------------------------------------------------------------Ratio of estimated Female to male earnings 0.32 0.65 ---------------------------------------------------------------------------------------------------------% to total Seats in parliament held by women 9.2 21.3

Female legislatures, Senior officials & Managers


Female professional And tech. workers

17 52

India-China comparative Business Scenario-2007


Particulars India China --------------------------------------------------------------------------------------------------------------------------------------------

(Rank out of 183 countries-2008)


-------------------------------------------------------------------------------------------------------------------------------------------Corruption perception index 85 72 ------------------------------------------------------------------------------------------------------------------------------------------1)

Procedure (no) duration


2)

cost (% GNP)

Procd.

Duration

Cost

Starting a business 13 30 days 70.1 14 40 days 7.5 ------------------------------------------------------------------------------------------------------------------------------------------

duration cost (as % of estate) Recovery rate (cents per dollar)


3)

duration cost

recovery rate

Closing a business 10 yrs 9 10.4 1.7yrs 22 35.3 --------------------------------------------------------------------------------------------------------------------------------------------

Source: Transparency international 2008

GLOBAL COMPETITIVENESS RANKING 2008-9: India and China (Rank out of 134 countries)
Pillars Components India China -----------------------------------------------------------------------------------------------------------------------GCI Global Competitiveness Index 50 30 -----------------------------------------------------------------------------------------------------------------------1 2 3 4 5
6 7 7 8 9 11 12

Basic requirements 80 Institutions Infrastructure Macroeconomic stability Health and primary education Efficiency Enhancer 33 Higher education and training Goods market efficiency Labour market efficiency Financial market sophistication Technological readiness Market Size Innovation and Sophistication factors 27 Business sophistication Innovation

42 53 72 109 100 40 63 47 89 34 69 5 32 27 32 43 28 64 51 51 109 77 2 56 47 11 50

Source: Global Competitiveness Report 2008

Major Areas of Reforms Needed


Labour market: Stringent labour laws should be relaxed Business environment: Lowering the barriers to entrepreneurship Ending reservation of products fro SSI Need for Bankruptcy law Dispersion of tariff rates Easing of Service sector FDI restrictions More privatization of public sector enterprises. Financial sector: More liberalization Privatization of public sector banks Infrastructure : Electricity reforms to be speeded up transport: More private sector involvement Public Finances: Better targeting of subsidies, GST Education: Higher public expenditure on primary and education, Addressing financing of higher edu.

India can learn from China in: Social and Physical Infrastructure Improving manufacturing sectors productivity

In Conclusion

India and China non comparable: India-- Democracy (messy) Highly diverse social structure Reforms reactionary in nature- a late starter Less integrated to Global market (including East Asia) Dissimilar trade pattern Lagging behind in FDI and infrastructure

Weak link between economic development and social welfare at regional level compared to China.

Differencing Relative strengths


India i) Agriculture reforms ii) Industrial growth iii) FDI IV) Open to external trade v) National market vi) Service sector vii) Infrastructure viii) Capital efficiency viii) Corporate governance ix) Democratic accountability x) Foreign portfolio capital China

Two divergent development Paths: India


i) ii) iii) iv)

China Top down approach

Increasingly building ground up Service sector led growth Private sector led growth (early nineties) Consumption driven

Manufacturing sector and foreign trade State led modernization (late 1970s) Investment driven

v)
vi)

Knowledge based sector-labor


Worlds back office

Cheap- assembly line workers


Factory of the world

India
vii)

China
FDI inflow State owned enterprises Aging workforce

Domestic Private Companies

VIII)

Young work force

VIII)

Cheaper labour

Rural reform

Indias hope!!!!

No Trade off to democracy for 2% higher growth! Accumulated diversity not assimilated. Both India and China have accepted the capitalist road to prosperity but capitalism is more comfortable in democracy which fosters entrepreneurs. Indias growth may be more enduring as people have scripted its growth whereas in China it is state crafted.
India- A country with Potentials for sustaining development!!

Because the Indian state is inefficient, millions of entrepreneurs have stepped in to vacuum. When government schools fail, people start private schools in the slums, and the result is millions of slumdog millionaires . You cannot do this in China!! Gurucharandas Times of India, 10 May 2009

THANK YOU

artinanavati@gmail.com

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