India:A Country of the Future?

India is sometimes referred to as the country of the future, i.e.; a likely candidate for the membership of the growth league of Newly Industrialised Countries (NIC). This paper examines the possibility of such an eventuality, not in isolation, but in comparison with the development of China, another large and poor country aiming at the same goal. The growth performance of China over roughly the same period in the second half of the twentieth century seems to have been much superior to that of India. The factors responsible for this superiority have been a very high saving and investment rate, single minded effort at growth, general acceptance of goals of growth and disciplined work due to communist ideology, and removal of obstacles, like great inequality and promotion of a relatively high quality of life. Indian effort, on the other hand, has faltered because of relatively low savings and investment, acceptance of a number of desirable goals which often clashed with each other, and the existence of a social and political structure which made it difficult to mobilise the necessary effort for development. The diversity and divisiveness of the Indian society led sometimes to wrong priorities and sometimes to dissipation of effort. Considerable progress has been achieved in the past, in spite of such handicaps and, in view of the much better current shape of the economy, India will continue to grow significantly. It is unlikely, however, that progress will be so high as to lead India to a membership of the NIC growth league.