X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2018 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster
  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Can this help India to surpass China's growth?
Fri, 27 Mar Pre-Open

"If you had the Japanese miracle, the East Asian miracle, the Chinese miracle, an Indian miracle is a tantalizing prospect and quite possible" says former RBI governor S Subbarao, in recent Credit Suisse conference that took place in Hong Kong.

India's comparison has been done quite often with China. Historically, on various parameters, China has triumphed over India. This is particularly true, when we compare the economic growth, infrastructure, manufacturing, exports, and so on. Despite this, it is believed that India will be a faster growing economy than China by 2020. As per an article in Mint, Mr Subbarao believes India can become growth miracle of the 2020s. And in this regard, there are few important aspects which lie in India's favour.

The first is India's stronger demographic dividend. India's younger workforce gives the country advantage over the aging population in China. As per estimates of United Nations, India will have the world's largest labor force by 2030 and during the same period, China's pool of workers aged between 15 and 59 are expected to reduce in size which will be equivalent of losing the combined working populations of the UK and France. India's rising youth population is expected to boost the manufacturing output in the country. Further, the changing demographics have compelled China to move up in the value chain, this is expected to push up the wages too in China. Thus increasing labour costs in China, is believed to benefit India.

We have already seen the Indian government is keen on boosting domestic manufacturing. Prime Minister Narendra Modi is strongly promoting Make in India campaign. The government is also looking forward to change the laws, and is taking initiatives to boost the manufacturing in the country. We also believe that the 'Make in India' campaign will tilt the balance in favour of Indian manufacturers. However, India does have its share of problems though.

Well, there is no denying that India's chronic infrastructure and logistics deficit makes it tough for manufacturing companies to achieve just-in-time production. It, along with the government, will have to work towards ensuring that there is a major overhaul in various laws in keeping with the changes in the economic and industrial landscape. So, it is clear that the 'demographic dividend' is not going to get automatically credited in India's account.

The government still needs to find ways and take solid steps to harness the best of our most valuable resource. Overall, it goes without saying that India has to exploit its full potential. Hence, from a long term perspective, India's growth prospects remain strong. And that will lead to a Megatrend which can unleash huge wealth building opportunities across various sectors.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

Read the latest Market Commentary

Equitymaster requests your view! Post a comment on "Can this help India to surpass China's growth?". Click here!

  

Small Investments
BIG Returns

Zero To Millions Guide 2018
Get our special report, Zero To Millions
(2018 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

MARKET STATS