India will overtake China in the next 25 years
Ten years ago, it was unthinkable to compare China with India. The emergence of India and China as major global players heralds new realities. Both countries have transformed the global political architecture increasingly shifting power from West to the East. The question issue here is the nature of the India's economic growth and its potentials to outperform China.
To-day India has become the world's most debating chamber before economists and entrepreneurs like you, it is not without a reason – it is an exiting love-affair with growing passion which reminds us all that rise of India means that democracy can be good for growth. It also poses a question that can an Indian political model based on democracy and rule of law can overtake rival Chinese political model of unbridled government authority as a formula for making poor countries rich.
India's economic dynamism constitutes a huge paradox comprising achievements and failures simultaneously. Economic reforms in India over the last few years in particular are promising but not sufficient. India may claim that there is no other country in the world which is so productive and that India's pluralistic system is in fact strength rather than a weakness, it is not too convincing given the slow pace of development. India may claim that because of the democratic system it has fallen behind China in terms of both FDI and growth rates, but in fact a lot of problems being experienced in India are not because of democracy but because of bureaucracy, controls and restraints in establishing enterprise and barriers in the way of entrepreneurship and lack of effective governance.
Two years ago the view that India might have a more competitive economy than China was met with incredulity. To-day comparison of the two countries offers valuable insights for us for the global economy. A fundamental distinction is that China's growth stems from resource accumulation while India's is rooted in increasing efficiency.
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