Last night, I was reading about Professor Jagdish Bhagwati (renowned professor on Indian Political Economy at Columbia University) who quotes that
‘we will more or less become what China is today and that will make us the fourth largest or maybe even third economy in the world’.
The answer to this question is so dynamic that even if you ask the same person each day, his answer will keep on changing. The world’s two fastest growing economies have now become the biggest investment homes.
China is growing at so rapid rate that at present the proportion of people in poverty are diminishing and a new generation middle class is formed. The point I want to make is not only related to China’s growth story but the Government there, which is so proactive that it is continuously implementing new policies, investments and right international strategies trying to beat the expectations.
What have been key factors for India’s promising future?
The age dependency factor is declining, i.e. The proportion of children and elderly people as compared to entire population is declining. So the working age population is growing faster than dependent and hence there’s structural rise in domestic savings.
The trend of increasing rate of government’s investment in infrastructure will boost the access for our demographic dividend. This has improved the utilization of working-age population, a key resource.
The third crucial one is the steady rise in exports to GDP and capital inflows to GDP has also helped accelerate the pace of growth.
How is China a threat to India?
China is today a huge military power and befriending India’s biggest threat (Pakistan) is itself an attack to India. China is actively participating in the affairs of India’s neighboring countries (Nepal, Bhutan). And Yes, China is eyeing Arunachal Pradesh since many years claiming it to be its own territory.
Chinese companies such as Huawei and ZTE have now gained a 15 per cent share in the Indian telecom market as their equipment is priced 30 to 40 per cent cheaper than their Western rivals Ericsson, Alcatel- Lucent and Nokia Siemens Networks. They’re winning contracts with Indian Telcos like Tata and Reliance.
The scare created by Chinese hackers targeting computer systems in India’s security establishments has only added to the security concerns.
Leading Chinese companies such as Dongfang Electric and Shanghai Electric have been the major beneficiaries and have been allowed to compete openly with India’s BHEL. The oil exploration and production sector is another field in which Chinese companies have been allowed to take up contracts.
Our Government should take a diplomatic stance on these issues and ensure that the trade between two giants is harmonious. India should simultaneously look at internal problems in Education, Healthcare, and security threats like Naxalism. With right strategies and policies, Will India be able to bridge the gap between these two Asian tigers?
Only time will be able to answer this. Your views?