Comparisons between India, China unfair: Ex-RBI chief Raghuram Rajan
What's the story
Comparisons between India and China are "unfair" as India "pales" before the Communist giant, which is about five times India's size, ex-RBI Governor Raghuram Rajan has said as he emphasized on improving infrastructure for the country's growth.
"I think the comparison is often made between India and China. That's a comparison which to some extent is unfair to India. They're two very different countries."
Information
Rajan was speaking at the 2018 Albert H Gordon Lecture
Rajan, the Katherine Dusak Miller Distinguished Service Professor of Finance at The University of Chicago's Booth School of Business, gave 'The 2018 Albert H Gordon Lecture' on April 11 at the Harvard Kennedy School on 'Leverage, Financial Crises, and Policies to Raise Economic Growth'.
Comparison
India "pales" in comparison to China, but impressive enough
On what India has not done that China has, Rajan said India has not built out infrastructure and construction.
An enormous part of Chinese growth has been better logistics, access to ports and roads, something "which India doesn't have".
But "by any criteria, except comparisons to China, India is a very impressive story," he said, mentioning the 7% GDP growth over 25 years.
Advantage
India's biggest advantage is that it is a democracy
"You've a close to first world civil society, very entrepreneurial politicians but a third world administration. Put that combination together and it becomes very hard to build out, acquire land and build those mega projects in India," Rajan said.
Voicing optimism he said, "At some point, we will figure out how to do it reasonably. India's biggest advantage is that it is a democracy."
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India is poised to achieve higher growth, said Rajan
"India is poised to achieve higher growth. It has a lot to do to get there but it doesn't have a deep constraint in reaching there. It has to make sure it doesn't go autocratic, but it has all the elements to reach there."
Economy
China's GDP growth rate made it the fastest growing economy
Rajan noted that once India's catch-up growth happens, which could be another 10 years, it will get "closer to the frontier. India is (then) much better positioned to stay there for longer."
In 2017, China's GDP growth rate of 6.8 percent was ahead of India's at 6.7 percent, giving the former the tag of being the fastest growing emerging economy.