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India's trump cards against China 
(Tue, 5 Oct Pre-Open) 
 
India's comparison with China has been done often enough. In most of the parameters, China has triumphed over its Indian rival. Especially when it has come to economic growth, infrastructure, investment overseas (in the oil & gas sector for instance) and the like. Despite that, India is touted to grow faster than China by 2013. And in this regard, there are two aspects which lie in India's favour.

The first is India's stronger demographic dividend. As the Economist has pointed out, China's one child policy means that the Chinese population especially its workforce is gradually ageing. India's workforce is much younger and therefore in a better position to contribute to India's overall growth. That said, having an increasing younger population does not make much sense unless it is imparted the right education and the trained with the required skills. Obviously, an educated young population would have more of a positive impact on the growth in GDP. Infact, although the age of the average Indian is much younger than that in China, the literacy levels in China exceed that of its Indian counterpart.

The second ace up India's sleeve is the strength of its private companies. Many of these companies demonstrate the entrepreneurial skills of its people. There have been a lot more ideas emanating from India. And this is why India Inc. has made increasing strides in the global arena. Most of the firms are competing on a global level and are not dependent on the Indian government to run their businesses. This is in contrast to China where a veil of secrecy envelops business and where the firms on a large part depend upon the government for support.

India does have its share of problems though. While infrastructure tops the list of India's woes, corruption is also a major spoke in its wheel. Scams and scandals have been so rampant here that it has now been ingrained in the psyche of the average Indian. It goes without saying that obliterating corruption will go a long way in taking India's growth to the next level. But for the time being, the will just does not seem to be there. Overall, it goes without saying that India still has to exploit its full potential. Hence, from a long term perspective, India's growth prospects remain strong.

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3 Responses to "India's trump cards against China"

Rajeev

Oct 9, 2010

India's politicians should work for country not them selve. we need an active primminster not a puppet

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Ketan Patel

Oct 5, 2010

A big change needs to be implemented on : VISION, INTENTION,EXECUTION & GOVERNANCE at the Govt. level without which it is just a fairy tale we are to hear for next few years!!!!!!!!!!

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The_Observer

Oct 4, 2010

I agree that India may have a demographic dividend but only if the country can feed, clothe and educate that "bulge". Also you forget tomorrow's dividend will eventually become a drain when they turn into pensioners. As China moves upmarket and as she still has loads of rural migrants who can take up the slack within China automation there will reduce the number of jobs required. China may eventually attend to their inverted demographic pyramid by easing the one child policy and this will probably happen nearer the time when large numbers of their old start to die off.

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