The most significant economic story of the past three and a half decades has been the rise of China. The second most significant story has been the rise of India. A big question is how fast the latter can grow. The answer is that it has an excellent chance of being the fastest-growing large economy in the world. But this requires significant improvements in policy and its implementation. The government of prime minister Narendra Modi, elected last May, has at least made a start.
Between 1980 and 2014 China’s average gross domestic product per head grew 17 times, according to the International Monetary Fund. In the same period India’s GDP per head grew fourfold. That is a huge gulf. But India’s achievements are significant. Hundreds of millions of Indians have experienced identifiable improvements in their living standards.
Furthermore, the country has many strengths: a legitimate political system; a youthful population; substantial technological and entrepreneurial resources; and, not least, room to catch up on the world’s richest economies.
