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Jag Report

Jag Report

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1 INTRODUCTION TO THE SUBJECT
ROLE OF HUMAN DEVELOPMENT AND GOVERNANCE IN ECONOMIC GROWTH OF A NATION Human beings are the real assets of a nation. Development is a never ending process and cannot be sustained if socio-economic ills remain in the society. Human development does not deny the importance of economic growth and wealth accumulation. Wealth maximization or income maximization should not be the only aim of the country as economic development is of no use if the residents of a nation do not have the access to healthy lifestyle and knowledge, clean environment etc. Human development is in fact a development strategy that is different from the economic development in that it deals with social and economic aspects of development in a balanced and simultaneous way. On the economic side human development is compatible with a free market where private sector plays an important role while the growth of income is absolutely necessary for human development there may be in the short run a tradeoff between additional income growths, non economic goals. Thus the purpose of developing policy is not necessarily to maximize economic growth but to establish a balance between income growth on one hand and social equity, environment quality and public participation in a democratic setting on the other hand. Hence human development seems to be a pre requisite for a long term sustainable growth. Governance refers to the formal and informal arrangement that determines how public decisions are made and how public activities are carried out from the perspective of maintaining a country’s constitutional values, public administration is a constituent pillar of governance. Governance indicates assess and compare the institutional quality of countries and can assist in research and policy making. Measuring governance quality is of thus of great significance. The role of government should be to provide a stable, political and economic environment. Government policies throughout the world should aim to promote a fiscal responsibility, remove barriers to completion and insure a legal framework for property rights and regulatory oversight and ensure transparency of the law and policies. Governance can be viewed as the traditions and the institutions by which authority in a country is exercised for the common good. This includes the process
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by which those in authority are selected, monitored and replaced, the capacity of the government to manage its resources and implement sound policies and the respect for the citizen and the state for the institutions that govern economic and social interactions among them. HUMAN DEVELOPMENT INDEX Human beings are a real asset of the nation. The study of human beings is very important because they are the vital from the point of view of economic welfare. Human beings are not only the means of production but also the ends themselves. The Human Development Index (HDI) is a composite statistic used as an index/glossary to rank countries by level of "human development" and separate developed (high development), developing (middle development), and underdeveloped (low development) countries Elucidating the concept of human development UNDP Human Development report (1997) describes it as ―the process of widening’s people’s choice and Human development levels of well-being they achieve are the core of the notion of human development‖ Human development stresses upon the that essential choices that should be made available to people are to acquire long and healthy life, to acquire knowledge and education and access to resources needed for a decent standard of living. The Human Development Report was to find to capture better the complexity of human life by providing a quantitative approach to combining various socio economic indicators into measure of human development. Human Development Index measures the average achievement in three basic dimensions of Human development    A long and healthy life as measured by life expectancy at birth. Knowledge as measured by life expectancy(with two third weight)and the combined primary, secondary and tertiary Gross enrolment ratio A decent standard of living as measured by GDP per capita.

Before calculating Human Development Index (HDI), an index for each of these dimensions is created for this purpose, maximum and minimum values are chosen for each indicator. Performance for each indicator is calculated as values between 0 and 1 by applying the following formula. Dimension index = Actual Value-Minimum Value/ Maximum value-minimum value.
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GOVERNANCE Governance refers to the formal and informal arrangements that determine how public decisions are made and how public actions are carried out from the perspective of maintaining a country’s constitutional values. Public administration is a constituent pillar of governance. Government indicators assess and compare the institutional quality of countries and can assist in research and policy making. Per capita income and the quality of governance are strongly correlated across countries. Worldwide Governance Indicators is a project developed by members at World Bank Institute. The project reports aggregate and individual indicators for more than 200 countries for six dimensions of governance they are       Voice accountability Political stability and absence of violence Government effectiveness Regulatory quality Rule of law Control of corruption.

This is the frame work that has been formed by the WORLD BANK INSTITUTE. Since governance is the process of decision-making and the process by which decisions are implemented, an analysis of governance focuses on the formal and informal actors involved in decision-making and implementing the decisions made and the formal and informal structures that have been set in place to arrive at and implement the decision. Good governance‖ should be consensus oriented, participatory, accountable, transparent, responsive, effective and efficient, equitable and inclusive and follows the rule of the laws.

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1.2 CHINESE ECONOMY
China’s economy is the 3rd largest in the world in terms of nominal GDP of US $ 4.91 trillion when measured in exchange rate. It is second largest economy in the world. When measured on purchasing power parity. Average annual growth rate is 10% and per capita income is approximately $ 3,677. China is the second largest trading nation in the world and is the largest exporter and second largest importer of goods in the world. China’s economy has moved from being a centrally planned system to that was closed to world trade to a market oriented economy. Reforms started out late in 1970s with a phasing out of collectivized agriculture and expanded to increase the gradual liberalization of prices, fiscal decentralization, increase autonomy for state enterprises, foundation of a diversified banking system, the development of stock market and the opening to foreign trade and investment annual inflow of foreign direct investment rose to nearly $ 108billion in 2008. The restructuring of the economy and the resulting efficiency gains have contributed to a more than entitled tenfold in GDP since 1978. The Chinese government faces numerous economic development challenges including  Reducing its high domestic saving rates and correspondingly low domestic demand through increased corporate transfers and the strengthened social safety net  Sustaining adequate job growth for tens of millions of migrants and new entrants to the work force   Reducing corruption and other economic crime. Containing environmental damage and social strife related to the economies rapid transformation.

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limited employment opportunities and insufficient access to basic and higher education over the long term growing population and changing demographics will only exacerbate social . India’s long tern challenges include wide spread poverty. More than half of the workforce is in agriculture but services are the major source of economic growth accounting for more than half of India’s output with only one third of its labor force.economic and environmental problems. 5 . inadequate physical and social infrastructure. economic liberalization has moved the economy towards a market based system. Since 1991.1. A revival of economic reforms and better economic policy in 2000 have accelerated India’s economic growth rate. and public ownership leading to slow growth and corruption. The economy was characterized by extensive regulation.3 INDIAN ECONOMY The economy of India is the 11th largest economy in the world by nominal GDP and 4th largest by purchasing power parity. India has developed into an open market economy yet the traces of its past autocratic policies remain. protectionism. India has capitalized on its large educated English speaking population to become a major exporter of information technology services and software worker. India was under social democratic based politics from 1947 to 1991.

5 NEED AND SCOPE OF THE STUDY As India and China are emerging economies of the world. 6 .4 OBJECTIVE OF STUDY The objectives of the study is to   Identify the factors that are hampering growth of India.1. To see the prospects of India emerging as a powerful nation 1. The basic purpose of the study was to know why India is lagging behind China in spite of being naturally gifted and having such strong demographics and geographical features.

Dobson W. and market reforms. while the indirect impact is a spillover effect of human capital on TFP growth. neither investment strategy is a magic bullet for reducing China’s regional income disparities. We find that FDI had a much larger effect on TFP growth before 1994 than after and attribute this to the encouragement of and increasing success of private and quasi-private enterprises. human and infrastructure capital. and neither offers a high degree of security to entrepreneurial activity. India’s Banks and capital market is more developed and more than China’s but still Indians prefer traditional method of investing like purchasing gold. It can be said that human capital investment in less-developed areas can improve economic efficiency. Although the two countries have succeeded under highly disparate governance environments. that promote economic productivity. Fleisher & Haizheng (2008) examines how regional growth patterns in China depend on physical. The direct effect is hypothesized to come from domestic innovation activities. The reason for China’s and India’s growth is not due to its governance but because of their large markets and abundance of low cost labor. People are still afraid to invest their money in stock market. The governance environment of these two countries points to a second important lesson that has attracted less attention. (2007) surveys about financial reforms in the world’s two most populous and most rapidly growing economies. such as infrastructure. It can be found that human capital positively affects output per worker and productivity growth in our cross-provincial study and direct and indirect effects of human capital on TFP growth of both the nations. especially the reforms that followed Deng Xiaoping’s ―South Trip‖ in 1992 those that resulted from serious hardening of budget constraints of state enterprises around 1997. foreign direct investment (FDI).Keefer (2009) states China and India offer to other poor countries is the profound importance for economic growth and poverty reduction of allowing private firms to compete in markets from which they were previously barred and of providing the complementary governments services. Momentum for reform exists in both countries within 7 . the lesson is a positive one. Here we can see that the financial reforms of both the nations have been compared and their impact in the future have been estimated.

India’s service sector is a big contributor to the GDP growth but employment absorption is not very high in this sector. urbanization accelerates and income level rises this all results in increasing the specialization of production. In spite of India’s service sector performing so well only 30 per cent of the population is employed. to use the concept more broadly to cover how any economy harnesses and uses new and existing knowledge to improve the productivity of agriculture. It would be more appropriate. and uses knowledge to enhance its growth and development. accounting and security service. industry. firms tend to outsource their service activities such as legal. Wu (2007) compares service sector developments in the India and China. As the economy grows productive capacity becomes more specialized. The knowledge economy is often taken to mean only high-technology industries or information and communication technologies (ICTs). 8 . If both the nation wants to be self reliant they need to update their financial market so as to sustain their growth. as well as to new knowledge-based activities—and in so doing. India should continue to leverage its strengths to become a leader in knowledge creation and its use. and informal service activities to more productive modern sectors. informal industry. Due to the availability of young. In India. What are the implications for future development of service sector In China and India? Which factors affect demand for services in China and India? These are some of the questions that have been investigated. to reduce poverty and touch every member of society. and services and increase overall welfare. India needs to its education system stronger and accessible to people to make its service not better than China but the BEST in the world Dahlman and Utz (2007) states the time is very opportune for India to make its transition to the knowledge economy—an economy that creates. great potential exists for increasing productivity by shifting labor from low productivity and subsistence activities in agriculture. skilled and English speaking generation compared to China India has outperformed China in this sector. however.the constraints of continued state ownership of banks. disseminates.

(iv) labor and capital flows do little to close income gaps. The growth has been sectorally an uneven. Bad inequalities directly reduce the potential for growth of the population. (iii) poor and slower-growing states have had little success in generating private sector jobs. In India political stability is required and in China social stability is required. From this we can see that both China and India wants to an overall growth they need to work on converting bad inequality drivers to good drivers as well. (ii) rich and faster-growing states have been more effective in reducing poverty. It finds that (i) the income gap between rich and poor states has widened. In this article ugly side of India and China has been shown. income distribution has been uneven. Greater private sector investment. Vazque and Rider (2005) in their paper they have brought forward that how a country’s inter governmental fiscal system plays a crucial role in shaping the conduct of governance and hence the performance of the nation overall. and better institutions are found to have a positive impact on growth. The imbalanced growth may be a threat to both the nations as it has raised the question that whether they would be able to retain their growth or not. smaller governments. Purfield (2006) examines how growth has varied across India’s states. Good inequalities are those that reflect and reinforce market-based incentives that are needed to foster innovation. Differences in states’ policies affect the cross-state pattern of growth. They should revise their fiscal and other economic policies so as to get the overall growth and make their position even stronger or else these factors will jeopardize their growth. Both the nations need to make themselves fundamentally strong and they should focus on overall development rather than only economic growth. India has huge labor all it needs is to convert itself from traditional working set up to a more modern set up. and (v) the volatility in economic growth is greatest in poor states. entrepreneurship and growth. both the nations have not been able to eradicate poverty. In this they have described 9 . The discussion is around good and bad economy inequality drivers.Chaudhuri and Ravallion (2006) examine the way in which development has been uneven in China and India and what is meant for inequality and poverty. rural and urban growth is uneven.

It is said that corruption slows any nation’s economic growth and neither country are using the potential of fiscal decentralization for improving the allocation of resources thereby achieving their respective growth potential. and contribute to widening income disparities at provincial and state level. In this paper they have rejected the fact that Foreign Direct Investment plays an important role in the growth of the economy. No doubt it plays an important role but its role is merely of a catalyst. Although India 10 .If both the nation wants to make their place stronger in world they should revise their fundamental policies that govern the respective nation. India should work on its infrastructure and China should try to work on its financial system to make themselves more self-dependent. Here we can see that China’s fiscal system is complex as compared to India but India’s fiscal system is more imbalanced compared to China. revenue allotments. Domestic capital remains king for capital accumulation. Attracting huge Foreign Direct Investment is the major factor that has contributed to the economic growth of China as it has helped China to set up a huge manufacturing base and developing a significant relation with USA. In this we can these two neighboring countries are very different culturally. Juggernauts are having a great influence and a presence at the present time. Foreign capital primarily contributes to its income growth through its contribution to technological change rather than capital accumulation. politically and economically yet these two Asian giants are giving each other a tough competition.about the China and India’s fiscal system namely about expenditure. Kamalakanthan and Laurenceson (2005) in this article prominently linked to rapid growth at the national level. If fiscal decentralization is followed properly it would increase the transparency in the system as accountability would increase Both the nations need to develop a comprehensive strategy for the formulation and implementation of Fiscal decentralization . fiscal transfer system and borrowing autonomy. India’s success can be attributed to the availability to cheap labor and English speaking and young population. This is one of the main reasons for the slow growth of India compared to China. Klein (2004) in this essay they have focused their attention on China and India as new economic.

a large part of China’s industry could follow a different path from India’s. Tschang (2003) India has enjoyed remarkable success over the last decade and a half in building a world class software industry.and China have made their place strong in the world but still they are combating with the internal problems. GDP also has a strong effect on literacy and health. China’s domestic firms hold about 33 per cent of the market. Thus. with official policy being to increase this to 60 per cent in ten years (Gartner Consequently. There are many peculiarities to China’s software industry which suggest that it may be quite different from India’s. Ranis G. it also has an indirect effect on human development. software has become an official part of the strategy for new industrial development India’s software industry relies heavily for its human capital on the elite regional institutes of technology. insofar as higher incomes facilitate the achievement of other crucial human development objectives. Whereas India’s domestic products market is largely dominated by multinationals. How effectively and efficiently they can overcome these problem will determine their FATE in the long run. In particular. it would seem to have no counterpart to China’s public R&D support for innovative software products. and a distinct structure and role in the economy quite different from India’s mainly export services-driven software industry. of course. One important component here is the role of the distribution of income. This different path has implications for India’s industry as it positions itself to advantages of the opportunities in China. 11 . China’s hardware manufacturing industry is better known in the world. However. also depends on other conditions of the society. The impact of economic growth on a nation’s human development level. it has somewhat different beginnings. Income growth clearly strikes one as the main contributor to directly increasing the capabilities of individuals and consequently the human development of a nation since it encapsulates the economy’s command over resources. both at a micro level within a household as well as at macro level across the households. (2004) tries to analyze the relation between economic growth and human development.

not relative. Due to License raj India has suffered a unique series of disasters caused by bad judgment on the part of Jawaharlal Nehru. this acceleration in Indian economic growth has not been "immiserizing". and regional and other dimensions of inequality have grown in the 1990s. Poverty has not fallen as fast as anyone would wish. But it is not the case that India's economic growth miracle is being fueled by the further absolute impoverishment of India's poor. 12 . India’s economic growth failure in the first generation after independence was absolute.Bradford and Long (2001) examines that before 1980 the growth of India economy was slow. Moreover. with a doubling time for average GDP per capita of only sixteen years. This was due to the growth retarding factors of Jawaharlal Nehru’s policy of ―license raj’. Conventional wisdom traces the growth acceleration neoliberal economic reforms implemented under the government of Narasimha Rao. Since the late 1980s India does not look ordinary at all. It has been one of the fastest-growing economies in the world.

3. For this study I have exclusively relied on the HUMAN DEVELOPMENT REPORT 2009 and WORLD WIDE GOVERNANCE INDICATORS. Here the purpose of the study was to find the causes for the slow growth rate of India compared to China. 13 . Descriptive research is to identify the cause of something that is happening.1 RESEARCH METHODOLOGY The research method that is being adopted is DESCRIPTIVE RESEARCH.

14 . As per the report the China’s HDI grew by 1.1 HUMAN DEVELOPMENT TREND IN CHINA AND INDIA As per the Human Development Report of 2009 both China and India are following in the category of Medium human development China’s rank is 92 and India’s rank is 134.772 whereas India’s HDI rose by1. Here we observe the two countries are surely working on all round human development in their respective countries but still India is behind China.612. The progress of both the nation is good although there are slower moments.1 Interpretation: The above graphs represent the trend from 1980 and 2007.37% annually from 0. The table below shows the comparison of China and India on various parameters which throws a light on some of the critical aspects of Human development.533 to 0.4.33%annually from 0.427 to 0. Figure 4.

e.7 INDIA Rank 134 128 120 134 Value . Total countries under scrutinized under the survey are 182 and India’s rank is 134 which is not a positive sign at all. This reflect the poor state of affairs and negligence of government of both nations especially India.9 93.Table 4.753 Interpretation: In the table above we see that India Has lower ranking compared to China In all the dimensions of HDI. China ranking is relatively very good compared to India and this reflects the lack of proper medical aid and unhealthy environment in India.772 72.1: Overall performance of India and China as per Human Development Report 2009 PARAMETER CHINA Rank Value . If we observe table carefully in all dimensions India rank is above hundred and China rank is above hundred only in 2 categories i. Many people are living below poverty line and do not have access to proper medical treatment.0 61.4 66. combined gross enrolment ratio and GDP per capita US $  Life expectancy at birth shows the average number of years a group of people born in the same year will live. Infant mortality rate is still high in India.In the table we can see that China ranks is at 72 and India’s rank is 128.383 128 2. 15 .0 HDI Value Life expectancy at birth Adult Literacy Rate 92 72 56 Combined Gross enrolment 112 ratio GDP per capita (PPP US$) 102 5.3 68.612 63. This picture is not very favorable.

Here China ranks at 102 and India ranks at 128. The gap in this category is huge. This shows that income of residents of both countries is not very good. India’s adult literacy rate shows that this is highly neglected area and this is one of the fundamental areas which help in the progress of the nation. Adult literacy rate is adult population aged 15 years who can read and write. This is a serious problem which needs immediate attention. If a nation’s population is not educated they cannot think and act rationally. Here China ranks at 112 and India ranks at 134. This even shows uneven growth in education sector of China. This is used as indicator to see the quality of life of residents which shows it is not very good.  Combined Gross enrolment ratio incorporates the combined number of enrolments in primary. If per capita income is low it affects all the other aspects of development because people are just not the means but also the end 16 . This reflects that people do not go in for complete education. Although Adult literacy rate is good in China but combined gross enrolment ratio is poor this shows that there is unevenness in three levels of education. In China less emphasis is being placed on core education and more on vocational education  GDP (PPP) per capita refers to the final value of all final goods and services produced within a nation in a given number of years divided by any population for a number for the same year. In this category China’s ranking is 56 and India’s ranking is 120. secondary and tertiary among the residents of a nation. Literacy rates are the indicators of socio-economic progress of a nation.

The percentile range of voice and accountability in China has been fluctuating between 5 percentiles to 10 percentile and for India’s has been between52 percentile to 62 percentiles which is very high compared to China.2: Voice and accountability in china and India Interpretation: Voice and accountability reflects whether the economy is participatory in nature. This is due to democracy being followed in India and here people have full freedom to exercise their rights and exercise their opinions. how much independence the people. China being a communist country do not involve public in its decision making process and hence less transparency is the 17 .2 GOVERNANCE IN CHINA AND INDIA Figure 4. media has in reflecting their opinions.4.

It is the political stability that attracts foreign investment in a country. 18 .Figure 4. From 1995 to 2008 the political stability of both the nation has shown a downward trend. But here is an exception As China is in transition phase and is moving from being communist to democratic and more open system.3: Political stability in China and India Interpretation: Political stability is the engine for economic growth. India is lagging behind China in economic growth as residents of India and abroad do not have faith in the government and fear to invest their funds in the country. Due to political instability. The political stability in China is between 33 percentiles to 43 percentile whereas India’s political stability is between 16 percentiles to 24 percentile.

4 Government effectiveness Interpretation: Government effectiveness refers to the quality of public services and civil services in the government sector. The government effectiveness of China is between 46 percentile to 64 percentile and India 51 percentile to 56 percentile. The degree of effectiveness refers to the quality of policy formulation etc.Figure 4. The trend for the nation has been constant over the years 19 . This defines the overall credibility of the government.

The percentile rank of China has been between 33 percentile to 50 and it has remained constant.Figure 4. This reflects that government is working on take make its regulatory system transparent and systematic.5: Regulatory quality Interpretation: Regulatory quality refers to measures the government ability to formulate. The percentile rank of India has been between 33 percentile to 46 percentile and for India trend has been improving. 20 . implement t sound policies and regulation and private sector development.

This is because the structure of governance in India is on democratic in nature and is more transparent compared to China. The Chinas percentile rank has been between39 to 48 whereas India’s has been between 56 percentiles to 62 percentile China has shown a constant trend whereas India’s trend has been improving over the time. 21 . gender etc.Figure 4.6: Rule of law Interpretation: Rule of the law signifies how fair is the legal framework of a nation. how much human rights are being protected especially minorities and whether equal treatment is being given to all the citizens of a nation irrespective of their caste.

The percentile rank of China has been around 32 to 54 and for India it has been around 38 to 51 percentile.7: Control of corruption Interpretation: Control of corruption refers how far government has been successful in exercising from petty gains to big scandals controlling. China and India have shown the average trend with regard to control of corruption. The corruption exists in both the countries but at the same time government has not been formulating appropriate policy to curb it.Figure 4. 22 .

This means that residents are not very secure about their future in their countries that is the reason why immigration rate is high in both the countries 23 .  China and India lacks social security. Inclusive means that growth has not penetrated in all the sectors and geographies  Political instability is the primary reason for the slow growth of India.5.1 FINDINGS Following are the findings of my study  Growth in both the nations is not inclusive.   India’s governance is more flexible as compared to China. This is the main reason foreign investors and domestic entrepreneurs do not want to invest the money in India because the environment is highly unpredictable. China and India both are not having good education infrastructure. Literacy is the key for socio economic progress and hence it is one of the most neglected areas by Indian government.

Although today both countries are progressing very well economically but both the countries need to work on their fundamental problems if they want to sustain and improve the growth rate in future. English speaking population etc.2 CONCLUSIONS From my study I conclude although India and China have come a long way in their economic growth and both have seen lot of turbulence and changes. India is very poor and slow in implementing its policies. The country which is able to understand and is able to amend its problem will be the winner in the long run. China on the other hand needs to open up more and should care for its people instead of its market. The next decade should be a wakeup call for both the nations to work upon their weaknesses. China needs to be more participative and India needs to be stricter in implementing its policies. India has very strong demographics.5. The only problem with India is its poor governance. 24 . India today suffers from mismanagement and bureaucratic paralysis. Although India is a democratic country yet people are not aware about their rights.

4 RECOMMENDATIONS  India needs to improve its governance. As China is developing at the cost of environment for this it needs to halt for a while and scrutinize its environment or else in future it might be very problematic for China in future. It is with better governance. India should develop more institutions like ITI (Industrial Training Institute) which should be able to give vocational education to people so that they can become more skilled.  China needs to improve its environmental quality. 25 . delivery system and effective implementation that India would be able to build to better infrastructure. increase agricultural productivity etc.  China and India both needs to improve the quality as well quantity of the education institutes in their respective countries. . Indicators are complex to observe 5.5.3 LIMITATIONS   Lack of availability of Data especially China.  In India Education level needs to be raised.

Bradford DeLong(2001) ―India Since Independence: An Analytic Growth Narrative‖ Jorge Matinez Vazque & Mark Rider (2005) ―Fiscal Decentralization and Economic Growth: a comparative study of China and India‖ Klein Lawrence R.―How important is foreign capital to Income growth in China and India?‖  Belton Fleisher and Haizheng Li(2008) ―Human Capital. and Laurenceson J.repec.REFERENCES ARTICLES  Kamalakanthan A.(2004‖) China and India: Two Asian Economic Giants.bepress. Two Different System‖ Shubham Chaudhuri and Martin Ravallion (2006) ―Partially Awakened Giants: Uneven Growth in China and India‖works. and Regional Inequality in China‖           Carl Dahlman& Anuja Utz(2007) ―India and the Knowledge Economy: Leveraging strengths and opportunities‖ Catriona Purfield (2006) ―Mind the Gap—Is Economic Growth in India Leaving Some States Behind?‖ J.html Wendy Dobson(2007) ―Financial reforms In India and China: A comparative analysis‖ Yanrui Wu(2007) ―Service Sector Growth In China and India: A Comparison‖ 26 .org/p/oec/devaaa/205-en.(2005).com/martin_ravallion/3/ Ted Tschang (2003) “China’s software industry and its implication for India‖ ideas. Economic Growth.

WEBSITES         www.org www.uq.ssrn. Engardio Peter (2008).‖ Harper Collins.imf.com www.org www. China and Japan.com www.org www. ―Asian Juggernaut: The rise of India.com www.‖ Tata Mc Graw Hill.ideas.au/economics/eaerg/dp/0405.com www.edu. ―Chindia: How China And India are revolutionizing Global Business.org.worldbank.pdf 27 .economywatch.BOOKS   Chellaney Brahma (2006).adb.undp.repec.

8 6.12 0.25 -0.2 6.72 -1.29 -1.8 4.7 7.23 0.21 0.20 0.66 -0.6 5.72 -1.31 -0.20 0.14 0.12 0.3 -1.17 0.32 -0.5 32.23 0.Chart Table Time Series Download Table.3 12.38 -1.8 5.5 9.5) Standard Error 15 13 12 11 Voice and Accountability 11 9 9 7 6 5 11 11 Political Stability 11 10 10 2008 2007 2006 2005 2004 2003 2002 2000 1998 1996 2008 2007 2006 2005 2004 5.xls Show Print Version CHINA Governance Indicator Sources Year Percentile Rank (0-100) Governance Score (-2.2 35.17 0.6 38.5 41.46 -1.68 -1.53 -1.28 -0.2 8.7 33.5 to +2.52 -1.20 0.14 0.58 -1.21 0.22 28 .16 0.16 0.

3 55.15 0.17 0.16 0.26 -0.1 42.16 0.4 46.24 -0.23 0.33 -0.12 -0.0 64.8 53.18 -0.39 -0.15 0.5 46.5 33.5 55.32 0.11 -0.17 0.0 -0.17 0.25 +0.11 -0.22 0.23 0.30 +0.28 -0.13 0.9 9 7 6 5 13 14 13 12 Government Effectiveness 12 11 11 8 8 7 12 12 12 11 Regulatory Quality 11 10 10 8 8 2003 2002 2000 1998 1996 2008 2007 2006 2005 2004 2003 2002 2000 1998 1996 2008 2007 2006 2005 2004 2003 2002 2000 1998 34.06 -0.3 38.01 -0.17 0.0 40.19 +0.23 0.09 -0.22 -0.15 0.29 -0.2 39.17 0.0 63.05 -0.3 45.24 0.20 0.06 -0.6 58.17 0.9 46.23 29 .1 39.4 41.09 -0.5 61.26 0.16 0.16 0.9 58.3 43.4 38.24 +0.19 0.0 46.32 -0.17 0.1 55.52 -0.

17 0.33 -0.4 43.22 -0.2 42.7 47.36 -0.14 0.61 -0.0 41.08 0.14 0.12 0.21 0.6 45.14 0.0 44.31 -0.1 33.8 36.8 41.36 -0.53 -0.13 0.14 0.7 17 17 16 15 15 Rule of Law 13 13 11 10 8 15 15 14 13 Control of Corruption 13 10 10 9 9 7 1996 2008 2007 2006 2005 2004 2003 2002 2000 1998 1996 2008 2007 2006 2005 2004 2003 2002 2000 1998 1996 50.44 -0.7 45.44 -0.36 -0.22 -0.43 -0.6 41.13 0.17 0.4 48.41 -0.23 0.37 -0.9 43.0 42.67 -0.15 -0.1 54.5 44.3 42.14 0.58 -0.12 0.13 0.41 -0.14 0.5 34.13 0.48 -0.13 0.13 0.15 0.9 32.3 39.45 -0.4 +0.15 0.18 30 .

5 to +2.1 57.14 0.21 .17 0.42 +0. and international organizations.42 +0.1 58.47 +0. or the countries they represent. These data are gathered from a number of survey institutes.. non-governmental organizations. Mastruzzi 2009: Governance Matters VIII: Governance Indicators for 1996-2008 Note: The governance indicators presented here aggregate the views on the quality of governance provided by a large number of enterprise.13 0.90th-100th Percentile 75th-90th Percentile 50th-75th Percentile 25th-50th Percentile 10th-25th Percentile 0th-10th Percentile Source: Kaufmann D. its Executive Directors.5 61. and M.7 58.5) Standard Error 15 14 14 Voice and Accountability 11 10 9 9 7 2008 2007 2006 2005 2004 2003 2002 2000 58.2 59. think tanks. The WGI do not reflect the official views of the World Bank.33 +0.17 0. A. Kraay.13 0.17 0.38 +0.45 +0. The WGI are not used by the World Bank Group to allocate resources Governance Indicator Sources Year Percentile Rank (0-100) Governance Score (-2.26 0.7 62.7 58.7 31 +0.41 +0. citizen and expert survey respondents in industrial and developing countries.16 0.

17 -0.9 18.17 -0.20 0.0 19.9 51.87 -0.15 -0.23 0.09 -0.68 -0.22 0.12 -0.15 0.04 -0.15 0.17 32 .7 18.4 52.9 46.20 0.7 52.9 46.16 0.22 0.90 -0.17 0.6 56.74 -0.12 -0.8 23.16 0.99 -0.98 -0.8 16.7 13.99 -0.6 +0.8 18.6 5 11 11 11 10 10 Political Stability 9 9 7 6 5 13 14 14 12 Government Effectiveness 12 11 11 8 8 7 12 Regulatory Quality 12 1998 1996 2008 2007 2006 2005 2004 2003 2002 2000 1998 1996 2008 2007 2006 2005 2004 2003 2002 2000 1998 1996 2008 2007 58.6 56.21 -0.24 0.1 56.23 0.23 0.13 0.7 53.6 16.6 18.03 +0.3 53.32 0.16 -0.17 0.05 -0.20 0.15 0.32 +0.8 24.16 0.20 -0.90 -1.21 0.23 0.08 -0.4 56.6 50.23 0.2 52.98 -0.22 0.16 0.

39 -0.36 -0.39 -0.3 40.13 0.4 47.13 0.8 47.5 57.17 0.21 0.23 0.17 0.12 0.34 -0.23 -0.03 +0.34 -0.13 +0.5 62.12 0.19 -0.1 45.13 0.2 58.3 51.1 57.35 0.6 60.23 +0.1 58.14 0.2 55.6 56.18 +0.21 -0.23 0.7 39.17 0.0 46.7 55.7 -0.14 0.13 0.14 33 .19 0.14 0.01 +0.5 41.11 -0.12 11 11 10 10 8 8 7 17 17 17 14 14 Rule of Law 13 13 11 10 8 16 16 Control of Corruption 16 13 13 10 2006 2005 2004 2003 2002 2000 1998 1996 2008 2007 2006 2005 2004 2003 2002 2000 1998 1996 2008 2007 2006 2005 2004 2003 46.5 56.07 +0.4 44.14 0.14 0.17 0.13 0.35 -0.6 44.13 0.21 +0.17 0.20 0.08 +0.5 41.37 -0.23 +0.34 -0.9 46.3 33.33 -0.12 +0.

6 38.38 0. 0.31 -0. measures achievements in the same dimensions using the same indicators as the HDI but captures inequalities in achievement between women and men.3 -0.17 0.44 -0.772. The greater the gender disparity in basic human development.40 -0. the lower is a country's GDI relative to its HDI. Table 3 shows how China’s ratio of GDI to HDI compares to other countries.3 40.770 should be compared to its HDI value of 0.15 0. and also shows its values for selected underlying indicators in the calculation of the GDI. Cuba (121.18 Building the capabilities of women The HDI measures average achievements in a country. but it does not incorporate the degree of gender imbalance in these achievements.10 9 9 7 2002 2000 1998 1996 41. Out of the 155 countries with both HDI and GDI values. China's GDI value.0%) 34 .0%) 1. ages 15 and older) 2004 secondary and tertiary gross enrolment ratio2004 Female as % male GDI as % of HDI Female as % male Female as % male 1. Lesotho (122.5%) 1.15 0. introduced in Human Development Report 1995. It is simply the HDI adjusted downward for gender inequality. Mongolia (100.7% of its HDI value. 9 countries have a better ratio than China's. Russian Federation 1. Its GDI value is 99. The gender-related development index (GDI). Table 3: The GDI compared to the HDI – a measure of gender disparity Life expectancy at birth(years) 2004 Adult literacy rate (% Combined primary.8 45.

Differing from the GDI.2%) 155.9%) 10. with a value of 0. Bulgaria (99. Iran (Islamic Republic of) (99.9%) 9.8%) 11. Gabon (104. Malta (104.7%) 8.and the gender disparity in earned income. 35 .3%) (92. the GEM exposes inequality in opportunities in selected areas. Afghanistan (29. Russian Federation (99. Afghanistan 190.7%) 78.3%) 106. China (104. and of female professional and technical workers.9%) 149.(121.533. Malawi (99.4%) 105. Indonesia (93. Kazakhstan (99. internal and international. It tracks the share of seats in parliament held by women.9%) 81.9%) 150. China (99. China (99.7%) 77. and improved prospects for their children. Afghanistan (55.8%) 12.3%) 145. reap gains in the form of higher incomes. Viet Nam (92. Swaziland (88.0%) 175. better access to education and health.8%) 148. Mauritania (99.0%) (98. China (93. Migration Every year.6%) The gender empowerment measure (GEM) reveals whether women take an active part in economic and political life. Côte d'Ivoire (104.8%) 151. Most migrants. millions of people cross national or international borders seeking better living standards. Israel (93. Occupied 107.5%) 109.3%) 80. Liberia (104.4%) Palestinian Territories 108. senior officials and managers. Albania (99. reflecting economic independence. of female legislators. China ranks 72nd out of 109 countries in the GEM.7%) 152.4%) 79. Latvia (99.

Indonesia 175.3 thousand migrants which represent 0. Myanmar 178.6 64.2 0. In China.0% of emigrants living there. Mongolia Global aggregates Medium human development OECD World 1.0 40. Table 5: Immigrants Destination of migrants Immigrant stock (thousands) Destination of migrants 36 Immigrants as a share of population (%) 2005 .9 0.0% of the total population. China has an emigration rate of 0. Mongolia 181.3 0. Table 4: Emigrants Origin of migrants 1.9 3.Most of the world’s 195 million international migrants have moved from one developing country to another or between developed countries.7 0.0 Asia Northern America Europe 43.4 Emigration rate (%) 45. The major continent of destination for migrants from China is Asia with 64. there are 590.5 77.6 77.3 37. Samoa 168.3 Major continent of destination for migrants Asia Northern America Asia Asia Asia Europe Europe (%) 46.7 The United States is host to nearly 40 million international migrants – more than any other country though as a share of total population it is Qatar which has the most migrants – more than 4 in every 5 people are migrants. China 181.2 33.5 0. Antigua and Barbuda 5.6 16.7 40.5%.3 41.9 3.

Hong Kong.833 million in remittances were sent to China.622.8 40.) Table 6: Remittances 37 . remittances are unequally distributed. more than half went to countries in the medium human development category against less than one per cent to low human development countries. However.721. Philippines 182.245.494. In 2007. Korea (Republic of) 76.2 374.6 195. are among the most direct benefits from migration. China Global aggregates OECD Medium human development World Remittances 97.0 Remittances.3 551. Singapore 39.1 1. Vanuatu 39. Qatar 8.266.4 OECD Medium human development World 0. Of the total US$370 billion remitted in 2007.5 2. which are usually sent to immediate family members who have stayed behind.5 0. China 80.0 590.4 0.5 39.0 1. China (SAR) 29.1 0. Indonesia 182.8 1. United States 16. They also serve as foreign exchange earnings for the origin countries of migrants.1 0.948. Average remittances per person were US$25. compared with the average for OECD of US$108. China (SAR) 180. US$32. (See Table 6 for more details. Viet Nam 181. their benefits spread broadly into local economies.8 3.0 8. Thailand 61.0 982. China 63.0 182. Hong Kong.1.

for example. Philippines 16. Indonesia 155. Cambodia 6. being educated (measured by adult literacy and gross enrolment in education) and having a decent standard of living (measured by purchasing power parity. China 4.going beyond income Each year since 1990 the Human Development Report has published the human development index (HDI) which looks beyond GDP to a broader definition of well-being.355 992 27 26 25 24 23 0 0 2.093 Medium human development 370. Indonesia 112. The index is not in any sense a comprehensive measure of human development. China 16. Korea (Republic of) 154. Lao People's Democratic Republic 157. Tonga 111. It does not. include 38 . Burundi 124.520 OECD 189. Luxembourg 3.765 World 108 44 58 Human Development Report 2009 India The Human Development Index . The HDI provides a composite measure of three dimensions of human development: living a long and healthy life (measured by life expectancy). Burundi Global aggregates OECD Medium human development World 32. income).174 1 0 117. Lao People's Democratic Republic 157. PPP.833 115.291 116. Thailand 3.Total remittance inflows(US$ millions) Remittances per capita(US$) 1.

only income and gross enrolment are somewhat responsive to short term policy changes.427 to 0. Of the components of the HDI.612 today. which refers to 2007. The human development index trends tell an important story in that respect. Between 1980 and 2007 India's HDI rose by 1. highlights the very large gaps in well-being and life chances that continue to divide our increasingly interconnected world. HDI scores in all regions have increased progressively over the years (Figure 1) although all have experienced periods of slower growth or even reversals. What it does provide is a broadened prism for viewing human progress and the complex relationship between income and well-being. it is important to examine changes in the human development index over time. The HDI for 39 . For that reason.33% annually from 0.important indicators such as gender or income inequality nor more difficult to measure concepts like respect for human rights and political freedoms. Figure 1: HDI Trends This year's HDI.

Nepal (60. Turkmenistan (64. Morocco 129. Liechtenstein (85. Bhutan (0.4) and Tobago (61. Table 1: India’s human development index 2007 Adult literacy rate (% ages 15 and above) 1.0) 136. Congo 182.1) 134. which gives the country a rank of 134th out of 182 countries with data (Table 1). Nicaragua (2.041) 133. Yemen (62.971) 1.6) 151.570) 181.619) 126.2) Combined gross enrolment ratio (%) 1.0) 121.619) 134. Australia (114.7) 132.0) 127.5) 130. India (63. India (61.601) 127. Egypt (66. Lao People's Democratic Republic (0.4) 129.0) 118. India (2. Lao People's Democratic Republic (64.2) 120.5) Republic of the) (298) 40 .6) 126.0) 122.3) 1.6) 133. Afghanistan (43.782) 128. Rwanda (64.612) 135.600) 130. Congo (0. Madagascar (61. India (66. Niger (0. Togo (62.610) 136.753) 135. Congo (Democratic Republic of the) (67.612. India (0.India is 0. Japan (82. Mali (26.8) (2. Norway (0.382) GDP per capita (PPP US$) Life expectancy at HDI value birth (years) 1. Viet Nam (61. Guyana (2.9) 128.340) 176. Trinidad 119. Solomon Islands (0. Cape Verde (3.2) 132. Georgia (100. Djibouti (Democratic (25.2) 177. Ghana (65.

By looking at some of the most fundamental aspects of people’s lives and opportunities the HDI provides a much more complete picture of a country's development than other indicators. By looking beyond income deprivation. focuses on the proportion of people below certain threshold levels in each of the dimensions of the human development index . having access to education. Figure 2: The human development index gives a more complete picture than income Human poverty: focusing on the most deprived in multiple dimensions of poverty The HDI measures the average progress of a country in human development.living a long and healthy life. such as GDP per capita. The HPI-1 value of 28. the HPI-1 represents a multi-dimensional alternative to the $1. ranks 88th among 135 countries for which the index has been calculated. The Human Poverty Index (HPI-1).0% for India. 41 .25 a day (PPP US$) poverty measure. and a decent standard of living. Figure 2 illustrates that countries on the same level of HDI can have very different levels of income or that countries with similar levels of income can have very different HDIs.

Malawi (28.0) 89.0) 121.4) (35. Djibouti (25. Afghanistan (78) 42 .7) 88. Czech Republic (1.2) 135.9) (Democratic Republic of the) (32.8) 87.1) 151. India (46) 138. Samoa (12) 150.4) 118. Congo 86. Bolivia (13. Ghana (28. Table 2: Selected indicators of human poverty for India Human Probability of Adult illiteracy People not using an improved water source (%) Children underweight for age (% aged under 5) Poverty Index not surviving to rate (%ages 15 (HPI-1) age 40 (%) 1. India (11) 136. Lesotho (47. Yemen (46) 75. China (12) 107. India (15. Bhutan (27.1) 90.9) 153.0) and above) 1. Papua New 122. Georgia (0.6) 103. Hong Kong. Rwanda Guinea (15.6) 119.The HPI-1 measures severe deprivation in health by the proportion of people who are not expected to survive to age 40. Kyrgyzstan (11) 135. Afghanistan (14.5) 106. Table 2 shows the values for these variables for India and compares them to other countries. Mali (73. Education is measured by the adult illiteracy rate. Syrian Arab Republic (11) 76.5) 1. Timor-Leste (46) 137. Barbados (0) 1. India (28. And a decent standard of living is measured by the unweighted average of people not using an improved water source and the proportion of children under age 5 who are underweight for their age. Croatia (1) 74.2) 105.6) 1.8) 78. Ghana (35. India (34. Cambodia 104. China (SAR) (1. Egypt (33.0) 77. Yemen (15. Bangladesh (48) 120.

(59. Cuba (121. and also shows its values for selected underlying indicators in the calculation of the GDI. India's GDI value. Its GDI value is 97. Russian Federation (121. introduced in Human Development Report 1995.7%) Adult literacy rate (% Combined primary.612. It is simply the HDI adjusted downward for gender inequality. The gender-related development index (GDI).1% of its HDI value. The greater the gender disparity in basic human development.0%) 43 . but it does not incorporate the degree of gender imbalance in these achievements.594 should be compared to its HDI value of 0.5%) 1. Table 3: The GDI compared to the HDI – a measure of gender disparity Life expectancy at birth(years) 2004 Female as % male 1. 0. the lower is a country's GDI relative to its HDI. ages 15 and older) 2004 Female as % male secondary and tertiary gross enrolment ratio2004 Female as % male GDI as % of HDI 1.8) Building the capabilities of women The HDI measures average achievements in a country. Mongolia (100. Table 3 shows how India’s ratio of GDI to HDI compares to other countries. Lesotho (122. Out of the 155 countries with both HDI and GDI values. measures achievements in the same dimensions using the same indicators as the HDI but captures inequalities in achievement between women and men. 138 countries have a better ratio than India's.0%) 1.

0%) (98. Burundi (89. Sudan (72. India (70.2%) 175. United Arab 151.1%) Territories (104.3 10.3%) 153.7%) 123. India (104.4%) of the) (66. India (97.0%) (104.6%) 143. Côte d'Ivoire Emirates (97.3%) 125.1%) 140. Afghanistan (29. Eritrea (69.137.8%) 122.6 91. Sierra Leone 152. millions of people cross national or international borders seeking better living standards. Sudan (97. Table 4: Emigrants Origin of migrants 1. Malta (97.2%) (104.0%) 141. Guinea-Bissau (72.4%) 155.4 . Sudan (89.0% of emigrants living there. Afghanistan Emigration rate (%) 45. internal and international. Most of the world’s 195 million international migrants have moved from one developing country to another or between developed countries.3%) 124.6%) 155.7%) 138. Congo (Democratic Republic 144. Swaziland (88. Congo (89.0%) 141. and improved prospects for their children. The major continent of destination for migrants from India is Asia with 72. Occupied Palestinian 142.7%) 121. Africa (104.6 44 Major continent of destination for migrants Asia Asia (%) 46. better access to education and health. India (89. reap gains in the form of higher incomes. Afghanistan (55. Benin (97. Most migrants. Antigua and Barbuda 53.1%) 139.5%) 140.8%. Senegal (90. India has an emigration rate of 0.9%) 154. Afghanistan 190.8%) 145.0%) Migration Every year.

3 Asia Northern America Asia Asia Europe 72.5% of the total population.7 1.4 158. Qatar 70. India 167.0 2. Maldives 181. Table 5: Immigrants Destination of migrants 1. Iran (Islamic Republic of) 180.9 thousand migrants which represent 0.9 40.4 0. Bangladesh 7. Pakistan 20. Pakistan 156.9 1.062.5 39.7 0.146.0 Asia Asia Europe 43. United States Immigrant stock (thousands) 39.886.4 The United States is host to nearly 40 million international migrants – more than any other country though as a share of total population it is Qatar which has the most migrants – more than 4 in every 5 people are migrants.886.5 Destination of migrants 1. there are 5. Maldives 153.266. India 180.2 1.7 1. Mongolia Global aggregates Medium human development South Asia World 2.8 0.554.9 3.6 3.2 45 Immigrants as a share of population (%) 2005 80.1 0.0 38.0 33. Bhutan 144.6 72.3 0. Maldives 5.5 5. Afghanistan . Iran (Islamic Republic of) 169. India 12.3 78.2 3.5 0. In India.

998 3 3. (See Table 6 for more details.9 0. They also serve as foreign exchange earnings for the origin countries of migrants.6 195. remittances are unequally distributed. Sri Lanka 98. However. Vanuatu Global aggregates South Asia Medium human development World Remittances 1.262 million in remittances were sent to India. India 15. Bangladesh 17. China 0.0 182. Iran (Islamic Republic of) 16 133.262 106. Of the total US$370 billion remitted in 2007. Maldives 35. Pakistan 1. are among the most direct benefits from migration. their benefits spread broadly into local economies.182. Maldives 10 46 . India 6.847.0 13. Bangladesh 102. US$35. Average remittances per person were US$30. compared with the average for South Asia of US$33.562 5. Pakistan 151. In 2007.8 3.4 South Asia Medium human development World 0.0 Remittances. which are usually sent to immediate family members who have stayed behind.948.355 131 41 37 30 126. Luxembourg 67.) Table 6: Remittances Total remittance inflows(US$ millions) Remittances per capita(US$) 1.0 40. more than half went to countries in the medium human development category against less than one per cent to low human development countries.245.

201 South Asia 33 Medium human development 189.765 World 58 47 . Burundi 0 53.157.093 Medium human development 44 World 370. Burundi Global aggregates South Asia 0 157.

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