Over at FT, David Pilling has an article on the dangers in Delhi’s dreams of overtaking of China. I do not know what is the danger in it. For whom? If it is dangerous for India to dream, then that is a wrong observation to make.There is nothing wrong in dreaming. There is something wrong in failing to make it happen. India runs that risk. There is no doubt about that. That risk is real. But, Mr. Pilling goes beyond that. You can read and make up your own mind. His article is here. It could be behind a paywall.
My response, posted beneath the article on the FT site, is here:
Mr. Pilling is right to inject a note of caution about India. But, he hits back too hard and too aimlessly. It comes across as an article with bile and without substance. That detracts from his broader point which is well made. India cannot be complacent. There are not too many reasons to be complacent either. Both are good points but ill-made by Mr. Pilling.
A campaign remark cannot be the basis for criticism. The Finance Minister’s remarks can be interpreted to mean that if the economy can grow at 8% to 9%, then it has the means to support the global economy.
Mr. Godrej is in the private sector and he was right to say that the time was right for India to shine. He might as well have been exhorting the government to do more. Perhaps, he is being quoted out of context here, deliberately.
India’s export share of GDP was below 20% in 2005 and it crested at over 25% in 2013. In 2014, it was slightly lower. There is no question that China’s share of world exports had risen to 12.1% from 1.0% in 1973 when India’s was 0.5%. Now, India’s share is 1.7% of world exports. This is based on WTO data. It has not grown the way that China has grown but it has grown and that cannot be without the world wanting to buy what India has to offer. This is only on merchandise exports.
Again, according to WTO data, in services, India’s exports were USD151.0bn in 2013 and that of China’s was USD205bn, in 2013. However, I am sure that Mr. Pilling knows enough of elementary statistics to calculate the share of GDP that India’s export in services is, compared to China’s.
This piece of statistics reduces his argument, that India does not make anything that the world is interested in buying, to a frivolous and irrelevant potshot. Well, it does more than that. It proves him wrong.
Let me refresh his memory. Five UK satellites were launched by India only in July 2015.
As for China’s GDP growth, well, even with statistical quibbles (and there is plenty of them), China’s GDP growth over the last three decades and more, is impressive. There can be no denying that. However, in the last fifteen years, much of it has come due to an enormously explosive growth in debt that will take a long time to pay off and might hold growth back for a long time to come. Perhaps, Mr. Pilling does not have time to read the dispatches filed by Mr. Jamil Anderlini.
I will give him one more piece of statistics to chew over: Labour Productivity Per person employed in China and India in 2014 US$. According to Conference Board data, India was ahead of China up to 2001. China’s began to exceed India’s from 2002 onward. Now, we also know about China’s debt explosion in the new millennium. On a debt-adjusted basis (or on a risk-adjusted basis, for future growth), India’s relative performance is nothing to sneeze at.
In India, land acquisition reforms are not shelved but wisely handed over to States – something that should have been done a lot earlier.
Now, whether or not India manages to raise its economic performance is a big question mark and there is enough scope to argue that the evidence over the last sixteen months is decidedly mixed. But, that there is an opportunity for India to get its act together and stand out is not silly non-sense as he claims. Perhaps, he knows that there are enough detractors and more like him inside the country who will eventually bear him out.
To suggest, based on one campaign remark and another one that hints at the potential to grow, that Indian officialdom is gloating is to paint with a malicious brush.
Here is a suggestion for FT journalists writing on India: How about suggesting to China to settle its land and sea disputes with its neighbours as India did with Bangladesh in June? Singapore’s Straits Times did that in an editorial on 11 August 2015.