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comparative study on indian and Chinese economies

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    OP-ED CONTRIBUTOR

    Why India Trails China

    MSMDNYC

    By AMARTYA SENPublished: June 19, 2013

    CAMBRIDGE, Mass. MODERN India is, in many ways, a success.Its claim to be the worlds largest democracy is not hollow. Its mediais vibrant and free; Indians buy more newspapers every day than anyother nation. Since independence in 1947, life expectancy at birth hasmore than doubled, to 66 years from 32, and per-capita income(adjusted for inflation) has grown fivefold. In recent decades, reformspushed up the countrys once sluggish growth rate to around 8percent per year, before it fell back a couple of percentage points overthe last two years. For years, Indias economic growth rate rankedsecond among the worlds large economies, after China, which it has consistently trailedby at least one percentage point.

    The hope that India might overtake China one day ineconomic growth now seems a distant one. But thatcomparison is not what should worry Indians most. The fargreater gap between India and China is in the provision ofessential public services a failing that depresses livingstandards and is a persistent drag on growth.

    Inequality is high in both countries, but China has done farmore than India to raise life expectancy, expand general education and secure health carefor its people. India has elite schools of varying degrees of excellence for the privileged, butamong all Indians 7 or older, nearly one in every five males and one in every three femalesare illiterate. And most schools are of low quality; less than half the children can divide 20by 5, even after four years of schooling.

    India may be the worlds largest producer of generic medicine, but its health care system isan unregulated mess. The poor have to rely on low-quality and sometimes exploitative private medical care, because there isnt enough decent public care. While Chinadevotes 2.7 percent of its gross domestic product to government spending on health care,

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    Why India Trails China - NYTimes.com http://www.nytimes.com/2013/06/20/opinion/why-india-trails-china.html...

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  • A version of this op-ed appeared in print on June 20, 2013, on page A27 of the New York edition with the headline: WhyIndia Trails China.

    India allots 1.2 percent.

    Indias underperformance can be traced to a failure to learn from the examples of so-calledAsian economic development, in which rapid expansion of human capability is both a goalin itself and an integral element in achieving rapid growth. Japan pioneered thatapproach, starting after the Meiji Restoration in 1868, when it resolved to achieve a fullyliterate society within a few decades. As Kido Takayoshi, a leader of that reform,explained: Our people are no different from the Americans or Europeans of today; it is alla matter of education or lack of education. Through investments in education and healthcare, Japan simultaneously enhanced living standards and labor productivity thegovernment collaborating with the market.

    Despite the catastrophe of Japans war years, the lessons of its development experienceremained and were followed, in the postwar period, by South Korea, Taiwan, Singaporeand other economies in East Asia. China, which during the Mao era made advances in landreform and basic education and health care, embarked on market reforms in the early1980s; its huge success changed the shape of the world economy. India has paidinadequate attention to these lessons.

    Is there a conundrum here that democratic India has done worse than China in educatingits citizens and improving their health? Perhaps, but the puzzle need not be a brainteaser.Democratic participation, free expression and rule of law are largely realities in India, andstill largely aspirations in China. India has not had a famine since independence, whileChina had the largest famine in recorded history, from 1958 to 1961, when Maosdisastrous Great Leap Forward killed some 30 million people. Nevertheless, usingdemocratic means to remedy endemic problems chronic undernourishment, adisorganized medical system or dysfunctional school systems demands sustaineddeliberation, political engagement, media coverage, popular pressure. In short, moredemocratic process, not less.

    In China, decision making takes place at the top. The countrys leaders are skeptical, if nothostile, with regard to the value of multiparty democracy, but they have been stronglycommitted to eliminating hunger, illiteracy and medical neglect, and that is enormously totheir credit.

    There are inevitable fragilities in a nondemocratic system because mistakes are hard tocorrect. Dissent is dangerous. There is little recourse for victims of injustice. Edicts like theone-child policy can be very harsh. Still, Chinas present leaders have used the basicapproach of accelerating development by expanding human capability with greatdecisiveness and skill.

    The case for combating debilitating inequality in India is not only a matter of social justice.Unlike India, China did not miss the huge lesson of Asian economic development, aboutthe economic returns that come from bettering human lives, especially at the bottom ofthe socioeconomic pyramid. Indias growth and its earnings from exports have tended todepend narrowly on a few sectors, like information technology, pharmaceuticals andspecialized auto parts, many of which rely on the role of highly trained personnel from thewell-educated classes. For India to match China in its range of manufacturing capacity its ability to produce gadgets of almost every kind, with increasing use of technology andbetter quality control it needs a better-educated and healthier labor force at all levels ofsociety. What it needs most is more knowledge and public discussion about the nature andthe huge extent of inequality and its damaging consequences, including for economicgrowth.

    Amartya Sen, a Nobel laureate, is a professor of economics and philosophy at Harvard.He is the author, with Jean Drze, of An Uncertain Glory: India and its Contradictions.

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