Feb. 10 – India’s Planning Commission deputy chairman Montek Singh Ahluwalia forecasts that India could emerge as the fastest growing economy in the world and overtake China since it has yet to achieve its full growth potential.
“We have accelerated … not reached the full peak of our growth potential which could easily be 9 to 10 percent. So, if India accelerates to say 10 percent and China begins to decelerate you could have a situation where India grows faster than China,” he told The Press Trust of India during the conclusion of the five-day World Economic Forum meeting in Switzerland.
India had been growing by over nine percent per year before the global economic crisis hit the economy and slowed down the country’s growth rate to 6.7 percent in 2009.
The economy is expected to slowly recover with 7.75 percent GDP growth rate expected this year. China in contrast reported a growth of 10.7 percent during the quarter ending December maintaining its position as the fastest growing economy in 2009.
Chris Devonshire-Ellis, Asia Briefing publisher and managing partner for Dezan Shira & Associates in Mumbai told 2point6billion: “The fact that India’s GDP growth will outpace that of China’s over the next decade should not be surprising. However it should be noted that India is set to achieve growth from a much lower base than China. ”
“It is far more difficult to maintain growth in an economy than has enjoyed major sustained growth such as China, and there is some doubt anyway about the accuracy of China’s stated growth rate. A gradual slowdown in GDP growth should be expected for China, and an increase for India. It would be normal economic behavior to expect this.”
India Politicians, Businessmen, Bureaucrats, Economists etc. all like to harp about India’s GDP growth rate but, no one ever even mentions the number of people below the poverty line and how that number is growing.
Ohzee’s assertion re poverty although relevant and a significant issue in grand schemes of thing India is a superpower and a strong democratic country, with assertive Army, Air Force and Navy, a huge manufacturing industrial base, with significant software industry, biotechnology, automative, pharmaceuticals and a self sufficient, confident and ambitious country. Indian business organisations and enterpeneurs are also taking over significant business acquisitions in USA, UK and the West with increasing investments in energy sources.
India is a self sufficient, strong, and proud country.
It is easier as I said to have a larger GDP growth coming from a smaller base. Regardless of India’s problems – which are many – the country however is poised to do what China did over the past 20 years. People forget how China was, and I recall similar disbelief that China would ever awaken in the mid-1980′s. Having seen that progression first hand, I also see the same self belief and to some extent set of circumatances that will project India along the same growth curve, whatever the naysayers may suggest. Thanks for your comments – Chris
If India sustain in its present GDP growth, it is very easy to overcome China. There is no reflection of recession in majour sectors, only one or two sectors are slightly affected. Superiority in science and space will be an adition to India.
@Ohzee
We started as a poor country. Therefore poverty has been a part of India. But whats worth mentioning is the progress we are making and eliminating poverty. We are coming out of poverty not descending into it. Also India is a complex country, with different cultures, religions and. We are a democracy with 1.2 billion people to be looked after. What we are achieving is phenomenal.
So we like to harp about the positive news i.e. PROGRESS
Is India the next Superpower? FYI, India is a Superpower.
Just consider the following statistics.
1. India is the largest democracy in the world.
2. India is the oldest civilization on earth with over 8000 years of history.
3. India’s 1.5 billions population is larger than China’s 1.4 billions.
4. The fastest growing economy in the world for the last thirty years, averaging 20% a year.
5. The smartest people in the world with the highest IQ anywhere on earth.
6. India has the longest wall in the world, the only manmade structure visible on the moon.
7. India will send a man to moon by 2010.
8. India has the lowest cost car in the world, the Nano from Tata motor.
9. 60% of engineers in Microsoft, Oracle, Sun, Google and NASA are Indians.
10. 25% of current US governors are Indian-Americans, including the youngest one, governor of Louisiana, Bobby Jindal.
Historically, India has always been the richest country in the world. However, after much siphoning by invaders and post independence by the British, it inevitably became a very poor country.
We are now experiencing a resurgence, I believe Indians are very clever people, you can take their money away from them, but certainly not that brain they have between their ears!
India should concentrate on improving infrastructure, promoting her culture, not adopting anothers’, and start to care more for her people and encourage her citizens to do the same.
There’s a stereotype that Chinese are slow with regards to irony and/or sarcasm.
Despite that, when I read asok’s post…
“obvious troll is obvious.”
Honestly, asok, what do you have against Indians?
Just FYI, a whole host of countries will eventually surpass China in terms of GDP growth simply because they start from a very low base. So it is not just India, and there is really not much to brag about.
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@Mayur, and @asok,
- “… India is a superpower …”
Even China DOESN’T call itself a superpower. All talks about Chinese superpowerdom, including terms like G2, comes from the West (and occasionally from overseas Chinese).
You never hear the Chinese govt or the Chinese people inside mainland China calling itself a superpower!
And you call India a superpower???
@anoop,
- ” If India sustain in its present GDP growth, it is very easy to overcome China ”
According to the CIA World Factbook :
China’s GDP = 4,814,000
India’s GDP = 1,095,000
If China grows at a meagre 8% and India at a blistering 10%, it would take almost 81 years for India to catch up!
ie, [ 4814000 * (1.08 ^81) ] – [ 1095000 * (1.10 ^81) ]
That is India would NOT surpass China before 2091. And that is assuming India can grow at 10% every year for 81 years!
I think China will stay ahead in growth terms because its government has too much money. All Chinese government has to do is to spend, spend, and spend. With $2.5 trillion at hand China can spend it in infrastructure which will inturn create jobs and keep economy growing at double digit rate. India does not have that kind of money and it would better serve India to lift people out of poverty rather than compete with China.
I think ALL that Montek has said was that India was poised to overtake China’s GDP growth rate. Frankly, I see that as being eminently “doable”.
Realistically, barring catastrophe’s, I see India and China growing at an average of 6% and 4% respectively over the next 50 years. Non-fudged figures for China
This has been predicted for several years but China has managed to put off by 5+ years the economic pundits’ forecast that India will overtake China in GDP growth.
I would expect that India and other countries will eventually have a faster growth rate than China. That is because those other countries start from a lower base just as China did compared to the developed world in the mid-1970s. In my opinion, predictions by the IMF and financial institutions different countries GDP by 2025 or 2030 will be widely off the mark. Bear in mind that a 5% growth on China’s USD 5 trillion economy is USD 250 billion/year in the first year from now. India’s USD 1.3 trillion economy on a 8% growth rate would gain USD 104 billion in the first year from now. Assuming 20 years of continuous growth with those same rates China will have an economy of USD 13 trillion economy (roughly the same size as the USA today) and India a USD 6 trillion one. I’ve been conservative with the growth figures as there are obviously constraints such as resource availability, competition, environment, etc that will affect these figures. China’s population will be middle-aged in 20 years time but hopefully more prosperous. India would have a large young population but I doubt that she that she can feed, clothe, house and educate them all at that stage with the constraints.
“India’s GDP growth rate will overtake that of China’s”
I am hearing of this for the last year, no more. And, of course, it is because of the higher base (for China).
To think that China can continuously grow at 10% for the next 20 years (2010-2030) is being excessively optimistic, almost dreaming, imho. We can totally agree to disagree on this one.
IF, China were to grow at 5% per year for the next 15 years and IF its current GDP was US$ 5 trillion, THEN China’s GDP at the end of 15 years would be US$ 10.4 trillion, no more.
Also, I didn’t see Montek talking about India’s economy becoming larger than China’s in any period of time.
China is obsessed with growth and will do almost anything to achieve high growth rates, including fudging figures blatantly. Absolutely no one outside of China trusts China’s reported numbers completely.
@Carlos – valid points, and well said. Montek was alluding to growth rates not economic size, and India is unlikely to overtake China in that aspect. However as a return on investment right now India is more likely to deliver higher rates of return. Our India operations growth is already faster than our China growth, albeit our India practice is just 20% of the size of our China practice. So what Montek is suggesting seems right from our experience. Thanks – Chris