The government simply has to find a way to deliver the
basics. That is what will defeat the Maoists and hold off China.
Tensions with China and the challenge posed by Maoists have
had their share of headlines these past few weeks. They are seemingly
unconnected issues, but they come into focus together when one looks at key
statistics on economic growth and human development. Take China first, for it
has acquired massive strategic advantage in terms of global economic impact,
diplomatic reach, military might and a hold on the world’s imagination because
it has performed spectacularly over three decades. Its economy has grown
10-fold since 1978, while its foreign trade has multiplied 70-fold in the last
decade alone; its exports are now more than India’s GDP. By way of comparison,
India’s GDP has multiplied about six-fold in the same period. It will take
India a full decade to reach China’s current level of per capita income. By
then, China will have overtaken the United States as the world’s largest
economy (calculated on the basis of purchasing power parity).
When it comes to human development indicators, the gap is
even greater. China’s human development index (calculated by the UNDP on the
basis of three factors — income, life expectancy and education) was 0.772 in
2007; India’s was 0.612, which was the level China had reached in 1990 ! At
the present rate of progress on the index (1.3% a year for India, about the
same as China’s), it will take two decades for India to get to where China is
today. As for economic development, China creates 10 times the power
generation capacity that India does in a year. Whichever indicator you choose,
China is one to two decades ahead of India, and on a rapid ascendancy curve.
Naturally, it will flex its muscles.
All this is history, and explains power disparities between
the two countries today. What of the future ? Some answers come in the World
Competitiveness Report, put out by the International Institute of Management
Development (IMD). Among 57 countries, China ranks 20th, India comes in 30th.
What is revealing is why India ranks so low. Of four primary factors, the
country does very well on economic performance (12th) and business efficiency
(11th). But on government efficiency it ranks 35th, and on infrastructure 57th
(i.e., last !). Go into the details and the rankings become even more
instructive : the last rank is on account of education, and health and
environment, while on business legislation India comes in 42nd. In other
words, the primary challenges are in areas where action is required most of
all from the government.
(Source : T. N. Ninan in Business Standard,
24-10-2009)
