Economic Growth Of India And China

1850 Words 8 Pages
India, being the second most populated country in the world, at 1.295 Billion, has enormous potential within the world economic stage. While India and China share similarities such as population and region, their economies are vastly differing beasts. As of 2014 both India and China have an expected GDP growth of 7 percent, China’s economy is roughly five times the size in value. However, when adjusting for the the purchasing power parity, China still have two and a half times the GDP of India. The Indian economy for years has lagged behind other nations in raw output as well as in the human development index. The theoretical economic capacity of India is massive, but it lacks the infrastructure to to fully utilize its population, as well as …show more content…
The rural areas are even more underdeveloped than the urban areas. With most production being done by hand, the indian population is incredibly inefficient through its food production, but through government subsidies it creates a surplus of food which it exports. This creates a weird situation of poor conditions, as well as inefficiently paid workers, the government is subsidizing for basic food producers rather than creating the infrastructure or promoting innovations. This means that without the government subsidies, the food production is unsustainable. On top of that, due to the limited technology and rural infrastructure, a transition to a more automated agricultural market out be extremely costly. This would lower the cost of food but if the subsidy was removed, the living cost might not change substantially. However this would free up capital to better implement in the future to promote growth, rather than having to cover food costs per annum. With such a massive population, food production is of the utmost importance. But through the Government subsidizing the cost of food production through manual labor, not only does this promote inefficiency, but prevents the diversification of the workforce, leading to less specialization and is unsustainable within the long run. Creating a self sustaining agricultural market should be India’s prime objective, for subsidy depended …show more content…
While India’s national government is very large and cumbersome, in order for nations change, they have to coerce the provincial governments as well. Even without an active force of resistance, the raw amount of rallying that would have to be done to pressure action, is simply too large. Comparing this to Chinese system, where the Communist Party simply decides the course of action and is able to implement it at a national scale. Through India’s safeguards such as the heavy regulation, as well as leisurely paced advancement, the quickest way for change might have to be a political revolution, or a self induced revamping governmental regulation to promote economic

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