Tuesday, 18 August 2015

Being the Best: Tiger vs. Dragon

For the first time in the past 18 years, India is expected to surpass China in terms of GDP growth rate. This is the prediction put forth by IMF and other top financial institutions all around the world. Let us analyse the possibility of this condition. If possible, how long can India sustain it, what impact does it make globally and domestically in terms of business, finance and manufacturing.
 
India opened its economy in 1991 and this is the second opportunity that has been provided to us after failing in 2009. While comparing the engine that drives both nations’ GDP, we can infer the following facts:

  • China’s GDP growth has been gradually declining.
  • Dipping of Chinese stock market - Government spending 160 million yuan in order to stop the downfall, which has been in vain.
  • Real estate bubble that is waiting to burst, with about 3-6 ghost cities that have been existing since 2011.
  • Displeasure among common people for the forced land acquisition for “development”.
  • Increase in labour cost
  • Finally, displeasure with Chinese government policies.

On the contrary, India has
  • growing investor confidence as promised by The Government to cut down bureaucracy in business with India,
  • a new majority Government in place, 
  • a great monsoon season
  • increased gold and dollar reserves,
  • an advantage of lowered crude oil prices,
  • nominal labour cost
  • progressive infrastructural development, energy investment and smart cities,

Indian Government has placed itself in a very good position with its “Make in India” policy, and rural bank account development schemes. Investors are gunning for India due to Euro’s volatility and the upcoming elections in the U.S., though its economy is still in its recovery stage. 

The fact of the matter is, at the snap of Beijing’s finger, China will dance to its tune and they will find a way to sustain their top position. Having said that, the powerful Communist Giant could be beaten by the Democratic and developing India, if the path of innovation in entrepreneurship, improvement in terms of quality manufacturing and decisive investment is pursued.

- Manicharan
manicharanr@gmail.com
                                                                                                                                         

8 comments:

  1. Nice..vry informative and thoughtful

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  2. Nice..vry informative and thoughtful

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  3. Very well articulated n nicely written, very simple n clear 😊👌👍

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  4. Good comparison and very well written. A small ray of hope for indians.

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  5. Good comparison and very well written. A small ray of hope for indians.

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  6. Nice manicharan !
    expecting your next blog on entrepreneurship development !!

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  7. Simple and clear.... Good start

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