Following the World Bank’s estimates last week that India’s growth rate will be faster than that of China, the International Monetary Fund (IMF) has recognised that India’s GDP is likely to grow at 6.3 per cent in 2016 and 6.5 per cent in 2017.
The IMF has also cut China’s growth rate to 6.8 per cent in 2015 and 6.3 per cent for 2016, which puts India’s growth at a rate faster than China’s.
India, in any case, is on a growth path, and if Prime Minister Narendra Modi’s vision materialises there is no reason why India will not see eight per cent, or even nine per cent, growth.
Corruption alone is said to eat up two per cent of GDP; if Mr Modi is able to control this in the short term, India’s GDP could really start to sizzle as it would unleash the unbounded energies and innovative abilities of the aam aadmi into creating productive assets.
There is nothing sacrosanct in the International Monetary Fund’s figures as it had trotted out India’s growth rate at 6.4 per cent in October and within three months it revised it down a fraction.
One does not know how and why the International Monetary Fund arrived at the lower figure eight months into Mr Modi’s regime, and the 50 changes his government has brought in by way of reforms.
The comparison with China is like comparing oranges to apples. To begin with, India’s growth rate is on a low base and China’s economy is four times larger than India’s.
Besides, China’s growth rate has been over 10 per cent in the last three decades and it has in the last two years been trying to cool down its overheated economy.
So its current GDP growth rate coming at 7.4 per cent a 24-year low is not a great worry for Beijing.
The bigger worry is to increase consumption as it had built massive infrastructure and this is reportedly lying unused. Its huge social problems could be exacerbated as it tries to control growth.
The Chinese leadership tackles its problems with seriousness and speed, which is still not so in India.
The leadership in India, from the Prime Minister downwards, like its predecessor, spends more time socialising with the suited-and-booted elite, more recently in the snow-clad environs of Davos, than with the small entrepreneur or worker who is unable to get into the mainstream because of bureaucratic hassles and graft.
Corruption is a major cause of impoverishment because the poor are not spared by greedy officials right down to the taluk level.
India has all the resources, both natural and human, and if these energies are unleashed by the “inclusive growth” programmes being truly inclusive, the International Monetary Fund’s figures could well be another figure gone wrong.
