There was a recent article in news which stated some magazines saying India’s long term potential maybe greater than China’s .. I somewhy disagree .. Here’s why ..
Most of the observations in the report are based on the governing structure of China .. Whereas India is a democratic country, China has communism .. I believe that democracy is one of hindrance in development (Btw .. I am not a communist) .. Why ..? For the simplest of reason.. Consensus is not always right .. Its not always true that what majority of people believe must also be correct .. Another reason is that as a democratic state, India has to plan its economic policies on a so called “human face” .. The governments cant enforce strict economic policies all because they fear losing their electorate … So they have to deviate between people’s “welfare” and economic reforms .. Mind you its not always that both are mutually exclusive but most of the time they are ..
Now coming to second point .. The report states that China is facing a shrinking workforce due to one child policy .. And by mid century, India will have around 200 Million more workers than China .. Oh yeah .. Considering the rate of unemployment in India and low rate of literacy, this huge population will become a burden .. Having more population does not mean that you have more workers .. It mean you have to support more people … So if not the government gets serious about unemployment and illiteracy, we on the roads of doom … And btw .. I believe that making people self employed is much easier than creating jobs .. Although, they have taken some measures in this regard but they arent enough ..
The report further states that “China’s lack of innovation and its tendency to be wasteful” can be a major drawback in next couple of decades .. Did I hear “lack of innovation” ..? I remember reading about China having world’s biggest ethanol plant and is building another equally big .. China like most developing countries import oil for its consumption .. With the soaring prices and increasing dependibility, most countries are looking at alternate sources of energy .. Bio diesel is one of them .. While China is doing well in this regard, India (which has a strong potential with Jatropha) is on backfoot with it .. This lack of foresight isnt good for India …
Another thing is that while most of the people depending on agriculture for their living, but the contribution to GDP by agriculture is very low .. A reason for this India’s agriculture being dependent on monsoon .. So if monsoon fails, agriculture fails … So creating infrastructures so that farmers become less dependent on rains will be an optimum decision …
Anyways .. I dont disagree with everything in the report …. There are many things which are really a must read .. You can read it here …
I conclude this with the last words of the article .. : What holds India back are red tape, rigid labor laws, and its inability to build infrastructure fast enough. With Beijing now pushing software and pledging intellectual property rights protection, some Indians fret design work will shift to China to be closer to factories.
Food for thought …?
