For India to have an economic growth like China, it needs to focus on just one thing, Shanghai-based independent economist Andy Xie has said.
India needs to imagine what its economy would look like. India needs to imagine what its cities would look like, said an influential economist. For India to have an economic growth like China, it needs to focus on just one thing and that is infrastructure, Shanghai-based independent economist Andy Xie has said. In an interview with CNBC-TV18, Andy Xie said that a developing country like India does not need to “look at GDP targets” but instead focus on infrastructural development.
“You look at what China did after 1998. The ramp-up in infrastructure was much quicker. They started building highways with 1,500 kms per year and built up very quickly to 6,000-10,000 km per year. This is the scale India needs for the economic growth,” Andy Xie, adding that India needs physical targets. He explained that growth means investment, investment means a bunch of projects.
“There are always tons of problems. You must grow out of problems and everything all else will come together to support growth… the most important part is urbanisation. India needs to build massive cities,” he told the news channel, adding that the key to fast growth is to turn labour into capital.
Speaking on India’s recent stride towards higher outlay for infrastructural development, he said that the country has made some progress but the pick up is insufficient if the target is to achieve GDP growth rate of 10% and double income in next seven-eight years.
However, the problem with India catching up China’s infrastructural development is the difference in the nature of politic of both countries. India’s former Reserve Bank of India (RBI) governor and noted economist Raghuram Rajan last month said that China has upper hand in building infrastructure as there the state owns every asset, while in India there are enormous pushbacks.
The reason he gives for China’s economic growth better than India is that the assets are owned by the state and it has the freedom to do whatever it wishes, while so is not the case with India. “In India, the state cannot do the same. The country is so crowded that a new road will run into someone’s backyard and there will be enormous pushback,” Raghuram Rajan said.