The tortoise, the hare, and the 150 families
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Even as China overtakes Japan to become the world's second largest economy after the US, the questions continue to be asked: is it a superpower yet? How far behind is India? The answers to these questions were discussed and debated at the launch of Superpower? The Amazing Race between China's Hare and India's Tortoise, a book by Raghav Bahl, founder-editor of Network18.
Bahl posed the question: if, in 1978, as Deng Xiaopeng's China began to open to the world, China's institutions were ravaged by the Cultural Revolution and its GDP was less than India's, how is that GDP four times India's today? The answer Bahl preferred was clear: China had chosen "effective" policy, borrowed from its predecessors in the rise to great power status. From the Soviet Union, it learned to extract economic surplus and send it straight into the grasping arms of the state. And from Japan, it learned openness to international technology and management.
India's state, on the other hand, he said, doesn't take risks. It fetishises incrementalism. True, said Sam Pitroda, the UPA's telecom and IT czar, in a recorded message: but India has a lot to learn about building, even though its "soft infrastructure" — its families, its support structures — remains stronger.
But, when talking about China and India, their differing demographic structure usually intrudes into the conversation. Opening a debate, Union Minister Kamal Nath said that, in his opinion, China will grow old before it grows rich. And the other intrusion into the conversation, always, is whether democracy helps or hinders. An obscene and self-defeating question, said Shekhar Gupta, Editor-in-Chief of The Indian Express. Democracy doesn't cause low growth; what happens in India, too often, is a disservice to democracy.
Former Sebi chairman N Damodaran agreed. Look at a sample of democracies, he said, and we'd see higher average growth than a random sample of autocracies.