Narendra Modi’s ‘sound economic policies’ have propelled India to trump even China’s GDP growth. Under his leadership, India is loosening its grip on the economy, while Xi's China has further tightened it.
Narendra Modi’s ‘sound economic policies’ have propelled India to trump even China’s GDP growth, says Panos Mourdoukoutas, Professor and Chair of the Department of Economics at LIU Post in New York. In a recent blog which published in Forbes.com, the economics expert says that India’s economy is expected to grow by 7.2%, exceeding China’s 6.9%. Interestingly, this projection of 7.2% is higher than the country’s long-term growth of 6.12%. At a time when government is facing severe backlash after India’s Apr-Jun GDP growth plummeted to a three year low 5.7%, this provides a whiff of fresh air.
The expert pointed out that under the leadership of Narendra Modi, India is loosening its grip on the economy, while Xi’s China has further tightened it. The professor says that India’s policies are focussed on loosening of controls on foreign investment, reduction of export-import taxes, and the removal of price controls.
Panos Mourdoukoutas says that India has done well by employing existing technologies to harness its resources, as the country is still in nascent stages in the curve of resource utilisation. In contrast, China which already has a high resource utilisation, has to push much harder to improve productivity from existing technologies.
India has also posted stellar jump in competitiveness ranking — India climbed 20 places to move to 40th spot in the World Economic Forum’s (WEFR) Global Competitiveness rankings from the 60th position four years ago in 2014, while China’s ranking crawled from 29 to 27 in the same period.
In fact, India which is the fourth fastest growing economy in the world, has gained praises from international credit agencies such as Aon, even as they remain less optimistic about China. “Aon is less optimistic concerning China, as they are Moody’s and S&P Global, which downgraded China in the last six months,” he noted in the blog.
However, the professor says that India has long way to go before catching up with China in a number of key metrics like per capita GDP, human development, and entrepreneurship. He also noted that India has been inconsistent with pursuing economic reforms, “with one government undoing what the other did.” Further, India will also encounter the same problems as China, one the excess resources in the country get exhausted.