Comparative Development Experiences of India and its Neighbours
STRATEGY GROWTH OF INDIA, PAKISTAN AND CHINA
India and Pakistan had similar strategy after independence:
There was mixed - economy model of growth, Public sector was to play essential growth and Private sector was assigned a secondary role.
Public sector reliance was major as the economies Pakistan and India needed huge investment which could only be incurred by the government.
China adopted Statism as their growth model where ownership of all resources was there with the state and the means of production along with what to produce and for whom to produce was was to be determined by the government only.
COMMON ELEMENTS IN THEIR STRATEGIES:
All relied on public sector majorly and followed ‘inward looking trade strategy’.
CHANGES OVERTIME IN THEIR STRATEGIES:
In India and Pakistan with time the greater role is now played by the private sector and FDI is given greater importance than the domestic investment.
China still continues with its statism model of growth. Although it has taken a led over India and Pakistan in the areas of GDP growth and structural transformation.
This will be studied through the following parameters:
GDP Growth, Structure of Growth, Demographic Profile and Human Development.
Achieved breakthrough in GDP growth in early 1980’s from 4 per cent to per annum to 10 per cent per annum due to shift from centrally planned to market economy, Influx of FDI and Cheap labour force availability.
Establishment of Special Economic Zones made China a destination for FDI. Domestic investment too was focused upon.
China’s GDP growth slowed down in recent past due to lowered demand for Chinese Products, Migration of people in search of higher wage opportunities and environmental degradation.
Only after the initiation of New Economic Policy in 1991 the GDP Growth in India showed a substantial rise, as it focused on liberalisation , globalisation ad privatisation.
Slowdown in GDP growth is a result of high rate of inflation, policy paralysis, scams and scandals and lack in inducement of FDI.
Pakistan achieved a breakthrough in GDP growth in the mid - 80’s. Economic reforms in Pakistan were similar to those in India but it turned to be disappointing because Pakistan was engaged by war of terror resulting unshrinking of FDI as well as Domestic Investment. Low income low growth trap was another reason.
2) STRUCTURE OF GROWTH
- In terms of sectoral contribution to GDP Pakistan and India now rely on tertiary sector while China relies more on secondary sector.
- India and Pakistan shifted majorly from primary to tertiary sector which implied that the industrial sector was given less emphasis if we compare that to China.
- Due to the expansion of service sector in India and Pakistan their economies are integrating with the global economies at a faster rate.
- In terms of employment India has failed to generate enough employment opportunities outside agriculture and the economy is witnessing a jobless growth.
3) DEMOGRAPHIC PROFILE
- India has 18 per cent of world’s population.
- China has 20 per cent of world’s population.
- Both countries require a heavy maintenance investment which means there is low development investment.
- ‘One Child Policy’ adopted by China turned out to be a successful measure as the growth rate of population decreased from 1.33 per cent in1979 to 0.47 per cent per annum.
- China and Pakistan are moving towards urbanisation at a faster pace than India
- Sex Ratio is biased against females in all three countries. Low sex ratio shows social backwardness and female foeticide is the main reason behind it.
4) HUMAN DEVELOPMENT
Important indictors are:
- Life Expectancy is better when higher,
- Adult Literacy Rates better when higher,
- Percentage of population below poverty lie should be always low, Infant Mortality Rate is better when lower,
- Maternal mortality rate again shoed be lower and
- Percentage of population having access to improved water sources should be higher,
- Percentage of undernourished population lower the better,
- Percentage of population having access to improved sanitation should be high.
Human Development Index developed on the basis of these indicators shows that:
HDI (2017) for: China - 0.752
India - 0.640
Pakistan - 0.562
- China performed better than India and Pakistan in terms of Infant Mortality Rate, Maternal Mortality Rate and Sanitation.
- Pakistan performed better in provision of improved water resources than India and China.
COMMON SUCCESS STORY OF INDIA AND PAKISTAN
- Both nations were able to double their per capita incomes, self - sufficiency in food production was achieved by both and their development in tertiary sector helped these countries to achieve the global recognition.
COMMON FAILURES OF INDIA AND PAKISTAN
- Failed inward - looking strategy
- Huge borrowing by the government has lead to poor fiscal management.
- More expenditure on defence and internal debt hindering the growth process.
- Lack of Implementation of policies in their full power.
INDIA HAS EDGE OVER PAKISTAN IN :
- Skilled manpower and research and development institutions.
- Human Capital Formation
- Intellect and defence technology, space research , telecommunications etc.
PAKISTAN HAS EDGE OVER INDIA IN:
- Migration of workforce from agriculture to industry
- External Trade expansion
- Efficiency of Investment higher despite low rate of investment in Pakistan
CHINA’S EDGE OVER INDIA:
- Rural poverty in China decreased by 85 per cent during 1978 - 1989 whereas India it came down by only 50 per cent.
- China’s agricultural reforms were far more fruitful than India in bringing radical transformation.
- Global exposure of China’s economy was far wider than India as it allowed 100 per cent FDI, established SEZ and allowed foreign investors the freedom to ‘fire and hire’ workers.
- Therefore it became 2nd largest economy in world.