Despite several protests over China’s intrusion into India’s domestic markets, the neighbour country still remains the go-to destination for India’s economic lessons. This anomaly was further reinstated in the Economic Survey tabled in the Parliament on Thursday.
The annual economic document cited China’s policies 129 times in both volumes of the survey, proving once again that the road to India’s $5 trillion economy dream goes via China’s tried and tested alleys.
In the first chapter itself, chief economic adviser KV Subramanian mentioned China 39 times to drive home what our giant neighbour has done right or wrong, and where India needs to take a leaf out of its book or learn its lessons from the Chinese experiment.
Subramanian compared India's growth record to China in the last five years to showcase the commendable progress India made during Modi 1.0.
He then drew evidence from the Chinese experience to show how the growth rate that India is targeting would only be possible on the back of a virtuous cycle — that of savings, investments and exports aided by a favourable demographics.
In a reference for job creation, the CEA highlights how high growth has not been possible without the presence of these enabling factors.
According to Subramanian, during the 1980-2017 period, per capita GDP in China rose in lockstep with a rise in savings, investments and exports. That is exactly how the Indian growth story will have to play out if it has to have any chance of replicating China's achievements, he said.
The CEA used a number of charts to show how China has relied primarily on savings and investment with consumption decreasing significantly as a share of GDP. "China remains an investment-driven economy even today with its investment and savings rates reaching about 45% of GDP even in 2017," the survey said.
According to the CEA, India is at a more favourable place than China when it comes to policy uncertainty. "While the economic policy uncertainty has been increasing across the world, including the US, UK and China; India’s economic policy uncertainty has been falling,"
Subramanian’s arguments, however, do not take into reference India’s policy tiff with China in terms of being an open economy and the massive trade deficit with the neighbour country. The references also come in stark contrast with traditional Indian trade bodies preaching economic policies starkly different from that of China.