http://news.bbc.co.uk/2/hi/south_asia/8273464.stm
This is an interesting article which discusses if India’s economy can overtake China. This theory is observed by those who believe that the growth rate between these two countries could change and India will pass up China’s economy faster than one would think.
India’s economy has just recently begun to accelerate. It wasn’t until the middle of the 1990’s that India loosened its bureaucratic nature regarding industry, services and trade. They experienced a growth rate of more than 9% until the international recession hindered their economic growth.
Some economists believe that the main reason why India’s economy will pass China’s is due to a “base effect” , in which they believe India’s growth rate will be higher because the base on which the rate is calculated is narrower.
China’s economy is currently three and a half times larger than India’s yet India has not suffered nearly as much in the international recession as China. This is because China is largely export-import driven, consisting 80% of its GDP whereas in India, exports-imports consist only 50% of its GDP.
Maria Thornblad
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