If there is currently a fever of economic gain and record rates of development in China, especially after it achieved the ranking of the second largest economy in the world, behind the U.S. and in front of Japan, then the next success story will be India, as anticipated by many. There are logical reasons for this prediction. India’s growth rate this year is expected to reach 8.5 percent, although it still has a long way to go, as the current size of China’s economy is quadruple that of India’s. However, the rapidly accelerating growth rate of India’s economy means it is likely to exceed that of China’s by 2013.
It is anticipated that the growth rate of India’s economy will continue to rise, and become the highest rate amongst all the major economies over the next 25 years. India will be able to achieve this for many reasons. Perhaps most important is India’s changeable demographic structure compared to that of China. India has a broad foundation of young people, enabling it to form very promising labour and consumption markets. China, however, has started to pay the price for its extremely strict policy regarding birth control. China does not permit more than one child per family, and this is an undeniable competitive advantage for India.
China’s economy is propelled by the state and the central government whereas in India the economy is dependent on a very dynamic and promising private sector. Companies are able to manufacture cars for 2000 dollars, and offer the cheapest open-heart surgical procedures in the world. Filters for drinking water are produced for less than half a dollar; whilst bridges are built at a tenth of their [standard] cost. Now the country has produced a prototype laptop for 35 dollars! Moreover, India has formed the largest steel production companies in the world. Indian car companies have managed to acquire manufacturing rights for brands like “Jaguar” and “Land Rover”, in addition to prestigious hotels.
The democratic atmosphere in India has allowed ideas to flow freely and smoothly. That is in complete contrast to the atmosphere in China, where piracy and secrecy dominate, a fact that has put off global technology companies. The biggest obstacle standing in the way of India’s anticipated success is its poor, underdeveloped infrastructure. This is the direct result of bad planning and bureaucratic confusion, which has already disrupted the Commonwealth Games projects, and given India a negative image (unlike the resounding achievement of the 2008 Summer Olympics in Beijing, China).
These reasons, and others, made an influential and outspoken figure, such as well-known political activist and Booker Prize winning author, Arundhati Roy, criticize the Indian government and mock its development statistics. Roy does not recognize India as a rising market, a promising Asian tiger, or an emerging economic power. Contrary to that, Roy puts forth alarming figures.
She says that 100 billionaires in India have assets equal to 25 percent of the national domestic product, and that 830 million people live on less than 20 rupees a day. In her opinion, this is a huge and inhumane gap. The view offered by Roy is not surprising. There are many similar views presented in the Third World which focus on one aspect of the economic picture: namely that figures highlighting low rates of unemployment and inflation depend on incomplete readings, fallacies and inaccurate comparisons.
For example, the unemployment rate could be measured against one sector of society, or a single age bracket. This would show the figures to be very low, which is misleading. The same goes for inflation rates. Non-strategic or subsidized goods are tested, and measured against inflation rates, thus providing an incomplete picture.
Some given rates and indications have been welcomed with cheerful optimism, yet they fail to have a positive impact on the spending power of the citizens, or their standard of living. This process of merely recounting data and statistics will remain a source of concern and suspicion. The ‘Indian lesson’ highlights the conflict within a rabid capitalism that shoulders no social responsibility; a capitalism that moves in two opposite directions: unlimited opulence for a select few, and widespread poverty for an increasing proportion of the population. What a tragic scenario! The Indian lesson is a general one, and is not exclusive. It is well-known and painfully experienced by Third World countries.