Those looking for reassurance that the Indian economy is faring well might now heave a sigh of relief. The reference is to a statement from managing director of International Monetary Fund, Kristalina Georgieva, that the “Chinese economy is decelerating steadily while India develops into a key growth engine.” Her statement came in the run-up to a meeting of finance ministers and central bank governors at the World Bank and the IMF in Washington. India is already being projected as the world’s fastest-growing economy in the post-Covid19 phase, the growth rate being seen to have gone above 7 per cent. This is short of the 9 plus rate of growth in the Manmohan Singh era, but 11 years of the Modi government have been a period of continued economic stability for the nation.
Set against the season of economic downturn in neighbouring nations like Pakistan, Sri Lanka and Bangladesh, India looks like it’s comfortably placed. Yet, a glaring growth in economic disparity between the rich, the middle class and the poor is all too pronounced under the Modi dispensation – a scenario evident also during the Manmohan era punctuated by globalization and ‘economic liberalization’. Singh’s “trickle down” theory – that the benefits of the rich becoming richer, or the national economy growing stronger, would percolate down to every individual down below, and more importantly the poor – may not have many takers now. The plight of India’s poor has not improved in any substantial manner in the recent decades, other than that they are fed with subsidized grains and other sops. Emancipation of the poor in significant ways remains a mirage. Narendra Modi’s lip-service to the poor in abundant measure too has helped little in this respect.
China, as the world’s second largest economic power after the United States, attained this exalted status by hard work and visionary leadership in recent decades. It started economic liberalization and even adopted a market economy – the hallmark of Capitalism—as part of reforms since the 1980s under the guidance of Deng Xiaoping. India took lessons from China from the 1990s under Narasimha Rao and Manmohan Singh. Notably, the economies of China and India were at the same level at the turn of the century—and so were their military strengths. Now, perceptions are that China commands a strength five times that of India’s in both these sectors. India grew majorly in the past three decades too. It is set to emerge as the world’s fourth largest economy; and is likely to outwit Germany in the near future.
The rise of two giants in the continent, alongside Japan, gives Asia a major economic heft. It must be noted here that former US secretary of state Henry Kissinger had visualized decades ago that the 21 Century would belong to Asia – while the 20th Century was America’s and the 19th Century Europe’s. The Covid19 eruption in 2020 had hugely upset China’s growth trajectory, but it has the wherewithal to reinvigorate itself. To India’s advantage is the large army of its young people, whereas China is ageing.
