DEVELOPMENT EXPERIENCES OF INDIA: A COMPARISON WITH

NEIGHBOURS
KRISHNAKUMAR C S
PGT ECONOMICS
DAV-BHEL SCHOOL, RANIPET
REGIONAL ECONOMIC GROUPS
• Economic and regional groups like SAARC,
European Union, ASEAN, G – 8, G – 20, BRICS
have been formed to promote international trade.
• They promote economic co-operation among
member countries.
• They are also aimed at strengthening the economies
of member countries.
 Steps taken by Nations for their economic
progress
• Formation of Economic and Regional Groups like
SAARC, European Union, ASEAN, G – 8, G – 20,
BRICS etc.
• Promote international co-operation.
• Promote foreign trade.
• Analyse the development strategy of neighbours.
• Evaluate their own strengths and weakness and
decide policies.
• Liberalisation
• Globalisation
 • Similarities in developmental strategies of India,
Pakistan and China
• All the three countries started their journey towards
development at the same time. India and Pakistan
got freedom in 1947. Communist Party came to
power in China in 1949.
• All the three countries adopted Economic Planning
to achieve development.
• India and Pakistan adopted Mixed Economy. China
adopted a Socialist system.
• Public sector is give greater role in the economies of
all the three countries.
• Till 1980, all the three countries had similar
economic growth rates and per-capita incomes.
• All the three adopted liberalisation, privatisation and
globalisation in order to achieve faster economic
development
PEOPLE’S REPUBLIC OF CHINA
 CHINA
• People’s Republic of China was established in 1949.
• China went under one party rule.
• China adopted Socialism as its economic system.
• All important sectors, enterprises, lands were
brought under Government control.
GREAT LEAP FORWARD
 The Great Leap Forward (GLF)
• This campaign was started in 1958.
• It aimed at industrialising the country on a
large scale.
• People were encouraged to set up industries in
their backyards.
• In rural areas, communes were started.
• Under the Commune system, people
collectively cultivated lands.
• In 1958, there were 26,000 communes
covering almost all the farm population.
 • Problems faced by GLF campaign
• A severe drought caused damages in China 30 million
people lost their lives.
• Conflicts started between Russia and China.
• Russsia withdrew its professionals who had earlier been
sent to China to help in the industrialisation process.
• In 1965, Mao introduced the Great Proletarian Cultural
Revolution (1966–76) under which students and
professionals were sent to work and learn from the
countryside.
ECONOMIC REFORMS IN CHINA
 • Economic Reforms
• In 1978, China introduced Economic Reforms.
• Reforms resulted in rapid industrial and economic
development.
• Economic reforms were introduced in phases.
• In the first phase, reforms were introduced in
agriculture, foreign trade and investment sectors.
• In the later phase, reforms were introduced in the
industrial sector.
 • Reforms in Agriculture in China

• Commune lands were divided into small plots.

These lands were given to individual families to
cultivate.
• Farmers were allowed to keep all income from the
land after paying taxes.
 Reforms in Industrial Sector
• Private sector was allowed to produce industrial
goods.
• Villages enterprises owned by local collectives were
promoted.
• State owned enterprises were made to compete
with private firms.
• Dual pricing was introduced. 50% of agricultural and
industrial goods had to be bought and sold at the
Government fixed prices. Remaining could be
bought and sold at the market fixed prices.
• Special Economic Zones were set up to attract
foreign investment.
PAKISTAN
 • PAKISTAN
• Pakistan follows mixed economy.
• Late 1950s and 1960s, Pakistan introduced
regulated policy framework (for import
substitution-based industrialisation).
• Tariff protection was introduced.
• Restrictions on imports like quota and licensing
were introduced.
• Green Revolution resulted in increased agricultural
output.
• In 1970’s capital goods industries were nationalised.
• In late 1970’s and 1980’s there was a major policy
change. De-nationalisation and encouragement of
private sector started.
• Pakistan received financial support from western
countries.
• Remittances from Pakistanis working in middle east
also helped in economic growth.
• In 1988, economic reforms were introduced.
DEMOGRAPHIC COMPARISON OF INDIA,
PAKISTAN AND CHINA
 COMPARISON OF DEMOGRAPHIC SITUATION
• Out of every six persons living in this world, one is
an Indian and another a Chinese.
• The population of Pakistan is very small and
accounts for roughly about one-tenth of China or
India.
• One child norm introduced in China in the late
1970s is the major reason for low population
growth.
• One child norm led to a decline in the sex ratio.
• One child norm and the fall in the growth of
population have other implications.
• For instance, after a few decades, in China, there
will be more elderly people in proportion to young
people.
• This led China to allow couples to have two
children.
COMPARISON OF GDP AND CONTRIBUTION OF
EACH SECTOR TO GDP
 • GROSS DOMESTIC PRODUCT AND
SECTORS
• China has the second largest GDP (PPP) of $22.5
trillion in the world.
• India’s GDP (PPP) is $9.03 trillion.
• Pakistan’s GDP is $ 0.94 trillion, roughly about 11
per cent of India’s GDP.
• India’s GDP is about 41 per cent of China’s GDP.
• Reform processes introduced in Pakistan and
political instability over a long period are the
reasons behind the declining growth rate in
Pakistan.
• Area suitable agriculture in China is just 10% of its
total land.
• China’s agricultural land is just 40% of India’s
agricultural area.
• Till 1980, nealy 80% of China’s population was
engaged in agriculture.
• The Government encouraged farmers to shift to
other occupations like handicrafts, trade and
transport.
• 2018 – 19 only 27% of its population was in
agriculture.
• In all the three countries the service sector is
emerging as a major player of development. It
contributes more to GVA and, at the same time,
emerges as a prospective employer
COMPARISON OF HUMAN
DEVELOPMENT
Factors that are not included while calculating HDI
• ‘People’s participation in social and political decision-
making’
• ‘Liberty indicators’ like Constitutional protection given
to rights of citizens’ or Independence of the Judiciary
and the Rule of Law’ have not even been introduce.
• In the above factors India stands ahead of her
neighbours.
 Why did China introduce structural reforms in
1978?
• Slow economic growth
• Lack of modernisation
• Maoist vision of economic development based on
decentralisation, self sufficiency and rejection of
foreign technology, goods and capital had failed.
• Despite extensive land reforms, collectivisation, the
Great Leap Forward and other initiatives, the per
capita grain output in 1978 was the same as it was in
the mid-1950s.
 Reforms benefited China in the following ways:
• Development of educational and health infrastructure,
land reforms, decentralised planning and the development
of small enterprises resulted in rapid economic growth.
• Reforms were introduced in smaller level and then
extended on a massive scale.
• Distribution of commune lands to individual families
helped in the economic condition of farmers.
• These policies also led to the growth of rural industries.
 Pakistan and Economic Reforms
• Growth rate of GDP and the contribution of all the
three sectors to GDP decreased in Pakistan after the
Economic Reforms were introduced.
• Poverty also started increasing in Pakistan in the
recent period.
• Increase in agricultural output was due to good
harvest not because of technological and
institutional changes. Food scarcity emerged during
the periods of bad harvest.
• Pakistan has taken huge amounts as loans from IMF
and World Bank. Repayment of loans is a heavy
burden on the economy.
 • Recent developments in Pakistan

• In the last few years, Pakistan started making

progress.
• GDP growth rate increased to 5.5% in 2017 - 18
• Industrial sector grew at the rate of 4.9.
• Service sector grew at the rate of 6.2 %.
 • INDIA
• India’s performance in economic development has
been moderate.
• Lack of sufficient infrastructure has been a factor
that prevents India’s growth.
• One-fourth of the population is still living under
poverty line.
• India guarantees democratic rights and freedoms to
her citizens.
 • PAKISTAN
• Following factors are responsible for poor
performance of Pakistan:
• Political Instability
• Over dependence on foreign aid and remittances
from abroad.
• Poor condition of agriculture.
• However, in the recent years, Pakistan has shown
better growth rate.
 CHINA
• In China lack of political freedom and violation of
human rights are serious issues.
• Economic reforms helped them to achieve rapid
economic growth rate.
• Reforms under a committed Government also
resulted in the reduction of poverty.
• They maintained collective ownership of land and at
the same time allowed individual families to
cultivate.
• Government introduced several social security
measures to improve the living standard of the
people.