
A Tale of Two Diverging Paths
In the 1980s, India and China stood at a similar economic crossroads. Today, however, China's GDP towers over India's by a staggering five times, highlighting a widening gap between the two nations. Akshat Shrivastava, founder of Wisdom Hatch, attributes this divergence to fundamentally different leadership priorities.
Shrivastava argues that Indian political parties are locked in a "freebie race," prioritizing short-term gains over long-term development. This approach, he contends, stifles meritocracy, encourages complacency, and hinders essential preparations for global competition. In stark contrast, China has invested heavily in infrastructure, technology, and an export-driven economy, laying a foundation for sustained growth.
The economic disparity is stark. In 1980, India's GDP stood at $186 billion, close to China's $303 billion. By 2024, however, China's GDP had skyrocketed to $18.5 trillion, a 61-fold increase, while India's GDP grew 21 times to $3.93 trillion. China's high-tech exports now dwarf India's by a factor of 43, and its manufacturing sector contributes a staggering 28% of global output, compared to India's 4%. Even in per capita terms, China's GDP of $25,015 far outpaces India's $10,123.
Shrivastava blames political complacency and short-sighted populism for India's sluggish progress. He questions the future prospects for hardworking Indians under policies that prioritize handouts over merit-based growth. This focus on subsidies and freebies, he argues, has stalled crucial reforms needed to prepare India for the global stage.
Raghuram Rajan, former RBI governor, echoes these concerns. He cautions against blindly replicating China's manufacturing model, warning of potential backlash from global powers. Instead, Rajan suggests India leverage its strength in services exports. However, even here, the lack of cohesive policies undermines potential gains.
economic reforms, substantial infrastructure investments, and a relentless focus on technology and innovation. This approach has propelled China to become the world's largest exporter, valued at $3.5 trillion annually, supported by advanced logistics and a skilled workforce of 200 million. In contrast, India's manufacturing sector, hampered by inadequate infrastructure and slower production efficiency, employs only 60 million people.
The contrasting trajectories of India and China offer valuable lessons. While India grapples with the consequences of short-term populism, China's strategic investments and long-term vision have propelled it to the forefront of the global economy. As India seeks to bridge the widening gap, it must learn from China's success and prioritize long-term, sustainable growth strategies.