Compara ve Development Experiences

of India and its Neighbours

China

- China uni ed under one party and established the People’s Republic of China.

- All the cri cal sectors like economic development, enterprises including lands owned and
operated by individuals came under the Government’s control.

Development strategies which are as follows:

● The Great Leap Forward (GLF) campaign established in 1958 led to massive scaled growth in
industrialisa on.

• Mao Zedong, the Chairman of the Chinese Communist Party, introduced the Great Leap
Forward (GLF) in 1958. The GLF was a ve-year economic and social campaign.

● Backyards of houses were encouraged to turn into small scale industries. Communes in rural
areas allowed people to collec vely cul vate lands.

● Chinese government created communes as a way to collec vize agriculture and industry:

- All private land was abolished, and ownership was transferred to the commune.

- The labor force was reorganized into work crews for large projects.

- Produce was divided 60% equally among members and 40% based on labor.

- Accumulated funds were used to support educa on and health care.

- Communes were made up of several Advanced Produc on Coopera ves (APCs) and
averaged around 24,000 people and 4,500 hectares of land.

- The communes were intended to help China surpass Britain and catch up to the US in steel
produc on.

● The Great Proletarian Cultural Revolu on (1966-1976) led a cultural revolu on to bring
prosperity; introduced by Mao Tse Tung.

● This revolu on included the growth of students and professionals by sending them to the
countryside for work. The GLF did not have a true measure of economic growth.

● China, from 1978 introduced economic reforms in phases.

ti
fi
ti
ti
ti
ti
ti
ti
fi
ti
ti
ti
ti
ti
ti
 ● Foreign trade,investment sectors, and agriculture growths were the targets for these reforms.

● In agriculture, individual households were allocated small plots, which also allowed them to keep
income a er paying taxes.

● Local collec ves were given the right to produce goods from their enterprises introduced as an
industrial reform.

● A er these reforms, China built state-owned enterprises to compete with local sectors.

● Farmers and industrial units had to buy or sell xed amounts of inputs and outputs at xed
prices set by the Government.

● The rest of the inputs and outputs were bought and sold at market prices.

● Special Economic Zones (SEZ) were set up to a ract foreign investors while the reforms increased
produc ons massively.

● The su cient surplus increased produc on and propor on of goods in the market and fueled
the modernisa on of the mainland Chinese economy.

● China's one-child policy was a government program that limited most Chinese families to one
child from 1979 to 2015.

Pakistan

Development strategies adopted :

• The policies of Pakistan and India show striking similari es.

• Pakistan focused on the co-existence of public and private sectors, i.e. a mixed economy model.

• The late 1950s and 1960s saw varying introduc ons of regulated policy frameworks.

• The policy was used to combine direct import controls with tari protec on for the
manufacturing of consumer goods on compe ng imports.

• The agrarian structure was reformed when the Green Revolu on led to industrialisa on and a
consequent increase in public investment in selected areas.

• Pakistan received good nancial support from western na ons, which s mulated economic
growth.

• Incen ve were o ered to increase private sector growth. This led to an increase in foreign and
local investments.

• The year 1988 witnessed various reforms that were ini ated in the country.
ft
ti
ffi
ti
ft
ti
ti
ff
fi
ti
ti
tt
fi
ti
ti
ti
ti
ti
ti
ff
ti
ti
ti
fi
 India

Development strategies adopted :

● India has a history of closed trade which puts a historical hurdle in front of it to develop new
trade policies as it shi s to a newopen trade system.

● The Sound Trade System reform was a major part in accelera ng the economic growth of India.

● India has implemented trade reforms that have accelerated economic growth.

● For example, in the 1990s, India reduced tari s from over 80% to 37% and devalued the rupee
against the US dollar.

● This led to a rise in the ra o of trade to GDP and an increase in export and import volumes.

● India also focused on increasing the per capita income resul ng in a decrease in poverty.

● Some policies to alleviate poverty were introduced to bring down the percentage of absolute
poor.

● Rural Development policies focused on the village economy.

● Rural growth was incredibly important for the overall economic growth of India.

● Employment genera on reforms were introduced to increase employment in the country

Similari es between India’s development strategies as compared to its neighbours:

● India and Pakistan gained independence and became separate na ons in 1947.

● While China’s People’s Republic was established in 1949. This puts all three countries in a similar
phase with parallel developmental paths.

● All of the three countries’ plans for development coincided with each other.

● Each of the three countries announced a Five Year Plan.

● India did it from 1951-1956, Pakistan named it Medium Term Plan and started it in 1956, while
China announced it in 1953.

● India and Pakistan both worked on crea ng a large public sector and boos ng social
development through larger public expenditure.

● Un l the 1980s, India, China, and Pakistan enjoyed similar growth rates, and graphs of their per
capita incomes were iden cal.
ti
ti
ti
ft
ti
ti
ti
ff
ti
ti
ti
ti
 ● China started its economic reforms rst in 1978, India was the last in 1991, and Pakistan started
it in 1988.

Success and Failures of Strategies in India and its Neighbours

Success of Strategies in India and Pakistan

● Poverty incidence is currently considerably lower in both na ons.

● Both na ons (India and Pakistan) have a ained self-su ciency in food produc on.

● Both countries have done excep onally well in rapidly growing their service and industrial
sectors.

● The usage of contemporary technology is improving in both na ons, but especially in India, and
at a rapid pace.

● Despite a high popula on growth rate, India has done very well in doubling its per capita
income.

Failures of Strategies in India and Pakistan

● Poverty and unemployment are important issues in both na ons.

● In the 1990s, the growth rate of GDP and its sectoral components slowed.

Success of Strategies in China.

● There was decentralized planning and the presence of a small business.

● Basic health services were expanded in many rural loca ons.

● The communal structure resulted in a more fair distribu on of food grains.

● There was infrastructure in the elds of educa on, health, and land reforms.

Failures of Strategies in China

● There was a lack of moderniza on and a sluggish rate of expansion.

● The Maoist economic growth ideal of decentraliza on, self-su ciency, and rejec on of foreign
technologies was a failure.
ti
ti
ti
fi
ti
fi
tt
ti
ti
ffi
ti
ti
ti
ti
ffi
ti
ti
ti
 ● Despite substan al land reforms, collec viza on, the Great Leap Forward, and other measures,
per capita gain output were the same in 1978 as it was in the mid-1950s.

Compara ve study on the basis of some economic indicators

Below are certain economic indicators that allow us to

judge the growth of each of them, like:

• Demographic Indicators

• Gross Domes c Product and Sectors

• Human Development Indicators (Including educa on)

Demographic Indicators

• Pakistan’s popula on is only about 1/10th of that of India or China. Even though China is the
largest na on, it has the lowest density among these three countries because it occupies a large
geographical area.

• Popula on growth is the highest in Pakistan, then India, and last comes China.

• The one-child policy that was applied in China in 1970 is the major reason fortheir popula on
growth cutback. But, this also leads to instability in their sex ra o.

• Son preference prevails in all three countries.

• Urbanisa on is high in China with a low fer lity rate and vice-versa in Pakistan. India has about
33% of the popula on in urban areas.

GDP and Sectors

● China has the second-largest GDP at $18.4 trillion, while India has $7.5 trillion, and Pakistan has
a meagre $0.89 trillion GDP.

● India was at the bo om of the GDP growth un l 1980, while China maintained double-digit
growth for over a decade.

● Pakistan’s GDP dunked below 4% due to poli cal instability and 1988 reforms.

● China’s size of cul vable land is only about 40% of India’s.

● A er the 1980s, China dropped incen vising agriculture and focused its e ort on handicra s,
commerce, and transport.
ft
ti
ti
ti
ti
ti
ti
ti
ti
ti
tt
ti
ti
ti
ti
ti
ti
ti
ti
ff
ti
ft
 ● Workforce propor on engaged in manufacturing in India and Pakistan were about 21% and 23%,
respec vely. Industries contributed to GDP at about 30% in India as compared to 21% in
Pakistan.

● The service sector is now the emerging factor to provide GDP growth in both these countries.
The growth of the agriculture sector has declined in all three countries in the last few years.

● The GDP of China is s ll in double-digits, where the manufacturing sector has played the biggest
part.

Indicators of Human Development

• China is moving ahead of Pakistan and India in terms of all metrics like GDP per capita, or
propor on of popula on below the poverty line, and historical development of compara ve
poli cs also suggests the same.

• Pakistan is ahead of India in reducing the propor on of people below the poverty line and also a
list of compara ve developments in developing countries puts Pakistan above India.

• Pakistan also pulls ahead in sanita on and water resources from India, while China outperforms
in all key metrics.

• Mortality rates in the three countries are as follows: lowest in China, then India, and last
pakistan
ti
ti
ti
ti
ti
ti
ti
ti
ti
ti