Day 42 – Q 1.Despite having similar socio-economic indicators in the late 60s, China surged ahead of India on almost all the fronts. Why did India lose the opportunity? Why do analysts consider the decades of 70s and 80s as lost decades? Critically examine.
1. Despite having similar socio-economic indicators in the late 60s, China surged ahead of India on almost all the fronts. Why did India lose the opportunity? Why do analysts consider the decades of 70s and 80s as lost decades? Critically examine.
60 के उत्तरार्ध में समान सामाजिक-आर्थिक संकेतकों के बावजूद, चीन लगभग सभी मोर्चों पर भारत से आगे बढ़ गया। भारत ने यह अवसर क्यों खो दिया? आखिर विश्लेषक 70 तथा 80 के दशकों को खोया हुआ अवसर क्यों मानते हैं? समालोचनात्मक जांच करें।
Often there is comparison between India and China in terms of growth and development owing to similar conditions they faced during 1960’s:
- Most populous countries.
- Lower per capita income.
- Large scale poverty and poor socio-economic indicators.
- Both suffered devastating famines in 1960’s.
However, today there is wide difference between the two as a result of policy measures which china took (land reforms, agriculture- communes, investment in health and education), different political environment, economic performance, which is reflected through their HDI ranking India-130 China-92,
Social indicators of
- India: IMR- 34 deaths/1000 live births, MMR- 130 deaths/lakh live births, Literacy-74%, Life expectancy-68yrs.
- China: IMR- 12 deaths/1000 live births, MMR- 19 deaths/lakh live births, Literacy-96%, Life expectancy-76yrs.
Economic indicators of
- India: ranks 5th in terms of GDP per capita, forex reserve US$400 billion.
- China: ranks 2nd in terms of GDP per capita, forex reserve US$3 trillion.
- Inequality rose to extreme level in India but only moderately in China as it invested more in education, health and infrastructure for the bottom 50 per cent of its population.
Why India lost opportunity:
- Democratic political setup where government has to work through consensus unlike communist China with centralised authority. It was difficult to implement reforms- be it economic or social. Ex: china controlled its population through one child norm while population control strategies backfired in India during emergency.
- Political instability taking focus away from growth and development.
- Delayed economic reforms and unfavourable global environment before India could reap full benefits of world trade (Financial crisis).
1970’s and 1980’s is termed as lost decades because of number of events which affected country’s growth and development.
- Conflict with Pakistan during 1971 & 1975.
- State of emergency in India 1975-77.
- Political instability and inadequate management of economy.
Ex: Congress party lost control over India for first time in 1977 and Janata government which came to power rejected 5th five year plan and introduced its own only to be rejected by Congress again.
- Economic front: During 1970s the government had exercised too much control on industries like MRTP, FERA act being in place. Presence of many sick PSU’s. Government nationalized many sick units to protect employment and incurred losses. By the year 1990 the Indian situation was chaotic and there was a financial crisis before the government.
However, there were certain positives too which occurred during this period
- Policy changes made during 1980’s which laid groundwork for reforms of 1991 like significant relaxation of industrial controls and related reforms like 25 industries were delicensed.
- Pro-business orientation in 1980’s like introduction of a modified value-added (MODVAT) tax by converting multi-point excise duties.
- Green revolution was achieved in the country leading to food security.
- Nationalisation of banks taking credit facility to needy and required sectors.
Though may not be to a level equivalent to china but India has still achieved significant progress since Independence. Programs aimed at improving socio-economic indicators should be persistent with specific emphasis on broadening access to health and education.
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