India and China are currently today the most talked about economies in the world. The world’s two fastest growing economies have now become the biggest investment homes. India is the second most favoured FDI (Foreign Direct Investment) destination in the world just behind China.
The Indian economy is no longer at the crossroads; rather, it is on the right path to sustainable growth. Gross domestic product (GDP) growth of 8.9% in Q2FY11 is a resounding validation of the India growth story —- it has effectively endured a global crisis and the worst drought in 30 years.
The current GDP(PPP) of India stands at 4,001,103 million$ while China’s at 10,084,369 million$ for 2010 so there is a huge gap that Indian economy needs to cover before it can beat China which has overtaken Japan in 2010 to become the second largest economy in the world.So the task ahead of India is really tough but what can be the keypoints that can help India bridge this gap and emerge out as a winner.
1.Sustainable Model of Government
China is still under so called Communism where the govt. is whole and sole and very less liberty is being given to individual’s feelings and aspirations.Mainland China is still run by the communist party. However, their economic practices are about as capitalistic as they come. There is an uneven distribution of wealth, not as true communist ideology would require. So China being a heterogeneous nation will sooner or later face this issue because in this flat world it’s not possible to sustain with such a model for a long time,No one likes to be ruled by stick. Violence in China's restive western region of Xinjiang,Uighurs problems,Tibet issues are already initial signs of such a problem while India has a much more sustainable democratic form of government which provides full respect and opportunities to an individual’s aspirations and clearly is form of rule by consent not by force.Though it’s true that India also faces issues like Telangana but they are not as severe as China’s where any dissent gets oppressed, It’s just the Indian Politicians who still need to prove themselves worthy of discharging their duties in a true and fair manner else our democratic form is a very stable and long term model.
2. Young Population
Though India is predicted to become the most populated country by 2050 leaving China behind but in a way it provides a great opportunity in terms of Human Resource Capitalization.Today China leads the chart in human resource outsourcing followed by India, with the more quality Human Resource at our disposal it can provide a great opportunity for India to sore up foreign currencies reserves in terms of more Indians going abroad and sending remiitances.Indians are supposed to have the highest saving rate in the world,about 40% so clearly there is a potential of tapping up this resource to fight with China’s already swelled 2 Trillion$ reserves.
Currently India has the world’s youngest population – The average Age in India is 25.1 Years while for china is 34 years. It is expected that, in 2020, the average age of an Indian will be 29 years, compared to 37 for China and 48 for Japan; and, by 2030, India's dependency ratio should be just over 0.4 Thus India has a ton of fresh minds entering the various industry, business, and education sectors. China however is facing a population crisis. The One-Child policy has left many parents to abandon their female children. So China is facing an unequal sex ratio and already the number of unmarried males in China has touched 24 million which is creating a chaos in their society. By 2015, China’s population will peak at 1 billion and then decrease steadily while Chinese government struggles with providing care to its aging millions.
3.Fortune at the bottom of pyramid
The famous book by noted management guru CK Prahlad who is the brain behind all 1Rs shampoo pouches that we see today being launched by MNC’s talks about the division of Indian economy in three tiers the top class which is as strong which is as strong as or more stronger than privileged class of any developed country,then we have the burgeoning middle class which is doing wonder in Indian economy revolution then we have the base or broadest part of our pyramid which constitutes of around 400 million people who do not have even the basic necessities of life or the deprived ones.So its like India is carrying a sub Saharan Africa with itself so as said by CK Prahlad if India is able to tap this market of 400million people it would add hoards of trillions of dollars to Indian economy working like a sprinkling effect from bottom to top of pyramid.Now this sort of situation is not prevailing in China,it doesn’t need to care about any such 400 million people it doesn’t has a lemon in its spoon while running unlike India and its one of the reason why China has run away with the economical growth and India is still limbering around a bit but if we are somehow able to tap this potential market and make this a useful one we can achieve a multifold increase in economy.Also solution to such a model would serve as a role model for other countries which are plagued with such an issue.So India doesn’t need to catch up with anyone else to stay in competition it just needs to catch up with itself to emerge out as a winner.
4.Trained Skill Force
4.Trained Skill Force
Both Indians and Chinese are one of the most intelligent and diligent people on the planet,it would be biased to take one side and declare them as more intellectual.The universities of both countries produce a large number of skilled doctors,engineers etc. every year. Currently, India is the 2nd largest producer of Engineers, scientist and doctors,but one thing that gets Indian workers edge is command over “English” which is clearly the international language.
India already ranks 2nd in English Speaking nations in terms of number of people speaking English, and is one of the prime reason for the success of Indian IT sector.Now even China has realized this shortcoming and that’s why we hear a lot of clamor going on in China to learn English.So,if coupled with the intellectual capability and better communication skills India has power to create world class professionals which is quite evident now a days with Indian names popping every now and then in newspapers.Today Indian students are highest in number possibly to get enrolled in prestigious foreign universities simply because they perform better in GRE due to command over English.As such,China do has become the factory of the west but no MNC would like to open a office there ,China is for manufacturing while India is for their offices where all financial and other skilled work is done because the skill force available in India edges out to China.And even if India is maintain this competitive edge it can prove vital in rise of Indian economy.
5.Environmental Issues and Agriculture Power.
India has highest arable land in the world , more than 50% of the land is arable in nature and we still haven’t been able to utilize our true potential as an agricultural nation,though our 70% population depends on it for living and bunch of schemes being planned and implemented by the government for farmers, irrigation and storage facilities related issues but every time due to vested interest of some people the policies are changed or twisted and the end result is all different from what is expected out of it.The Ganga basin in northern India is supposed to be the most fertile land in the world,so consider the huge possiblty that India has to serve as the granary of the world.Though we have become self sufficient in meeting our food requirement and export a bit of some food items but consider the lack in rope that what we are getting and what we can achieve.We already are the biggest exporting nation for fruits and vegetables.So we just need to remove this slack in rope to become a major mechanical agricultural nation and if we are able to do this anyhow since our major population is dependent onagricultral sector ,what we are going to do in turn is making most of Indians very stable in terms of financial poewer and achieve a true “India Shinning”.While as far as China is concerned though it may be very huge in terms of land area in comparison to India but most of china’s land is not arable and is occupied by deserts like Gobi.So even if china want to progress in agriculture it will be constrained by its limits.
Rachit
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