India, Pakistan, and China have many similarities in their development strategies. All three nations started their development efforts at the same time. India and Pakistan got freedom in 1947 while China came into existence in 1949. All these nations started their planning in similar ways. India commenced its five-year plans in 1951. China started its plans in 1953 and Pakistan in 1956. Till 1998, Pakistan and India had completed eight five-year plans whereas China had ten five-year plans till 2006. We will now briefly discuss about the development strategies followed by these nations one by one.
Discuss Development Strategies of India
Since 1951, India has completed ten five-year plans. The eleventh five-year plan for the period 2007-12 is in progress. We have adopted the framework of a mixed economy. Accordingly, the country maintained the public sector and the private sector simultaneously. Before 1991, the public sector had been awarded the predominant position in the strategic areas. The private sector was sought to be controlled, restricted, and regulated. Several types of restrictions were imposed on foreign investment. But since 1991, there has been a major shift in government economic policies. A new strategy of development with an emphasis on liberalization privatization and globalization (LPG) was introduced. The LPG Model of Development emphasizes a bigger role for the private sector. It envisages a much larger quantum of foreign direct investment to supplement our growth process. It aims at export-led growth strategy as against import substitution practiced earlier. Further, it aims at reducing the role of the government significantly and thus abandons planning in a strict sense in favor of a more liberal and market-driven pattern of development.
Discuss the Development Strategies of Pakistan
When we look at various economic policies/strategies followed by Pakistan, we find many similarities with India. Like India, Pakistan also followed the path of a mixed economy after independence. There is a co-existence of public and private sector side by side in Pakistan. In the late 1950s and 1960s, Pakistan adopted a regulated policy framework for the country’s industrialization. It granted tariff protection to domestic consumer goods industries. It also imposed direct import controls. In the field of agriculture, there was increased public investment in infrastructure in select areas.
There was mechanization in agriculture. As a result, production of food grains increased.
In the 1970s, capital goods industries were nationalized. But in the late 1970s, there was a shift in the government policy when it adopted the policy of denationalization. The private sector was encouraged. During this period, Pakistan received financial assistance from Western countries. It also started receiving remittances in a big way from the Pakistani workers settled in the Middle- East. Besides the then government also offered incentives to the private sector. All of this helped in simulating the country’s economic growth and created a conducive environment for new investments. In 1988, reforms were introduced in the country. Pakistan adopted the policy of economic liberalization, stabilization, and structural adjustment. After 1988, the World Bank and IMF directed the economic policies in Pakistan.
Discuss the Development Strategies of China
As told earlier, the People’s Republic of China came into existence in 1949 under one-party rule. After this, all the sectors of the economy including various enterprises and all lands owned and operated by individuals were brought under government control. A program named the Great Leap Forward (GLF) was started in 1958 which aimed at the country’s industrialization on a large scale. People were encouraged to set up industries in their backyards. As regards agriculture, China resorted to a Commune System of Production under which people cultivated lands collectively. About 26,000 communes covered almost the entire farm population in 1958.
The GLF program faced many problems. In the earlier phase, a severe drought occurred in China killing about 30 million people. Due to a border dispute with China, Russia withdrew its professionals from China who had been sent there to help in the industrialization process. In 1965, Mao Tse Tung (a strongman of China) started a cultural revolution. This revolution aimed to weed out people opposed to communist ideology. Students and professionals were sent to work and learn from the countryside. China has now officially condemned that revolution which rocked the country during 1966-76.
Since 1978, China introduced reforms in phases. In the initial phase, reforms were introduced in the fields of agriculture, foreign trade, and investment sector. Commune lands were divided into small plots which were allotted to individual households for cultivation. However, they were not given ownership rights over these plots. The cultivators were permitted to keep all farm income after paying taxes to the government. Then, reforms were introduced in the industrial sector. Private firms and local cooperatives were allowed to set up manufacturing units.
Now, State Owned Enterprises SOEs (in India we call Public Sector Undertakings PSUs) were made to face competition from newly established private sector firms. A dual pricing system was also introduced. Under this system, farmers and industrial units were required to buy and sell fixed quantities of inputs and outputs based on prices fixed by the government, and the rest could buy and sell at market prices. Over the years, the proportion of inputs or outputs transacted in the market increased as a result of an increase in production.
Special Economic Zones were set up to attack foreign investors.
Explain the development experience of India and its Neighbors
Now it is time to conduct a comparative study of the development experience of the three nations India, Pakistan, and China. This can better be studied under the following heads :
Rate of Growth :
The growth of Gross Domestic Product (GDP) is considered a very important indicator of the development of a nation.
- Till about 1980, the economies of India, China, and Pakistan were growing at a slow speed. Their GDP growth rate remained about 4 percent per annum.
- It was around the early 1980s in China, mid-80s in Pakistan, and early 1990s in India that a breakthrough in GDP growth was recorded.
- In the year 2005, India and Pakistan recorded a GDP growth rate between 6 to 8 percent; China recorded a GDP growth rate of about 10 percent per annum. In all three nations, the higher growth rate has been attributed to economic reforms.
- There has been greater reliance on foreign direct investment. But China has performed well. It has been the favorite destination of foreign investors. About 10 percent of global foreign direct investment finds its way to China. China was the center of attention of the world during 1980-90 when it was able to achieve and maintain a double-digit growth rate. This was the period when even many developed countries were finding it difficult to achieve a growth rate of 5 percent.
Refer Table below :
Growth Rate of GDP (%) (1980-2010)
|Country||1980 – 90||2000 – 2010|
We also notice in the table that during the 1980s, Pakistan was ahead of India in terms of GDP growth rate. Among these nations under study, Pakistan was at the bottom. In the 1990s, the Pakistan system GDP growth rate of 6.6 percent. China experienced the same growth rate during 2000-2010. In terms of PPP $, China’s per capita GDP has been estimated at 11477 US $ whereas that of India at 5150 US $ and of Pakistan at 4652 US $. All this confirms that China is ahead of India and India is ahead of Pakistan as far as the size and growth rate of GDP are concerned.
Sectoral Distribution of Output
We will now study the sectoral distribution of output and employment in these three nations. First, we look at sectoral contribution to GDP. In both India and Pakistan, the share of agriculture to GDP is the same. Refer Table below :
Sectoral Share of GDP
|Sector||Contribution to GDP|
In India, the contribution of agriculture to GDP is 17 percent. In China, the contribution of agriculture to GDP is 10 percent. The share of industry is the same in India and Pakistan (z6%). But, in China, industry contributes the highest to GDP at 47 percent. The highest contribution in India and Pakistan comes from the service sector which accounts for more than 50 percent of GDP. China’s economic growth has been along the expected lines. Historical experience of the developed countries shows that as an economy develops first the industrial sector and later the service sector emerges as the leading sector of the economy.
- China has emerged as the manufacturing hub of the world. About one-half of its GDP originates from the industrial sector. The service sector comes second and then the agriculture sector.
- In India and Pakistan, there has been a direct shift from the primary to the tertiary sector. In other words, the share of the industrial sector to GDP has been smaller compared to the service sector.
- China has succeeded in developing its industrial sector fast compared to India and Pakistan. This is perhaps due to the program- “The Great Leap Forward”(launched in 1958) and the policy of “Reforms and Opening-up” initiated in 1978 which gave a big push to the exports of Chinese manufactured goods.
Sectoral Distribution of Workforce
Now, we proceed to analyze the sectoral distribution of the workforce.
Sectoral Distribution of Workforce (%) (2012)
|Sector||Distribution of Workforce|
The table above shows that a major portion of the workforce in India (51 percent) is engaged in agriculture and after that comes services and industries with 27 percent and 22 percent respectively. In China, a portion of the workforce is engaged in service ( 37 percent) but after that come agriculture ( 34 percent) and industries (29 percent) respectively. Thus, the service sector is prominent in comparison to the industrial sector in India.
Compare the Demography features of India and its Neighbors
- Size: Now we will compare some demographic features of India, Pakistan, and China. China is the most populous country in the world with 135 crore population. India comes to the second position with 123.7 crore population. The population of Pakistan is very small when compared to the population figures of both China and India. It has a 17.9 crore population.
- Growth Rate: When we compare the rate of population growth in all these three countries, it is highest in Pakistan with 1.68 percent per annum followed by India with 1.26 percent. It is the lowest in China with 0.49 percent. The One-child Norm (adopted by China in the late 1970s) was the main reason behind this arrest in the growth population in China. The growth rate which was 1.33 percent per annum in 1979 has declined to 0.64 percent in 2005. This means, after a decade there will be proportionately more elderly people in China’s population as compared to young people. In other words, a limited number of young people will have to look after the welfare of a large old population. China has also a low fertility rate whereas it is very high in Pakistan.
Select Demographic Indicators 2012
|Population (in million)||of population||Ratio||Rate||sation|
- Urbanization: Both China and Pakistan have relatively higher urbanization rates as compared to India. In India, 31.2 percent of the total people live in urban areas, in China 52 and in Pakistan, 37 percent of the people live in urban areas.
- Density of Population: The density of the population is another important demographic feature that needs to be considered. China is the largest country among all the three countries with 95,61,000 square kilometers area, followed by India with a land area of 32,68,090 square kilometers Pakistan is the smallest with a land area of 8,03,944 square kilometers. However, the density of the population (i.e. average number of persons living per square kilometer) is the lowest in China. It is 144. It is because China has the largest geographical area among these three nations. This figure for India is 411, which is the highest among these nations. It should be noted here that there is no relation between the density of the population and the level of economic development reached. However, other things remaining constant lower density implies lesser stress on the country’s natural resources.
Discuss Human Development
Let us now study, how India, Pakistan, and China have performed in terms of human development. The Human Development Index (HDI) is regarded as a very important indicator in this context. HDI does not replace GDP but adds considerably to an understanding of the real development of a nation. It measures the average achievement in three basic dimensions of human development which are :
- A long and healthy life is measured by life expectancy at birth.
- Knowledge as measured by adult literacy rate.
- A decent standard of living as measured by per capita GDP. HDI is the rating of different countries on a scale of 0 (which represents the lowest human development) and 1 which represents the highest human development.
HDI Values (2014)
The table above shows that China is ahead of both India and Pakistan in terms of human development. Out of 188 countries for which the HDI was constructed by the United Nations Development Programme in 2016, China is placed in the 90th position. India is ranked at number 130 and Pakistan at 147.
Some Selected Indicators of Human Development, 2015
|Human Development Index||0.624||0.738||0.550|
|(Value) with rank||(131)||(90)||(147)|
|People below the poverty line (%)||68.3||76.1||66.4|
|Adult Literacy Rate (% aged 15 and above)||62.8||94.3||54.9|
|GNI per capita (PPP US$)||5663||13345||5031|
|People below poverty line (%)||21.9||15.9||22.6|
|Infant Mortality Rate (Per 1000 live births)||42||16||70|
|Maternal Mortality Rate (Per 1 lakh births) (2015)||200||37||260|
|Population with sustainable access to improved sanitation (%)||35||65||44|
|Population with sustainable access to an improved water source (%)||92||92||91|
If we compare other indices of human development such as the proportion of the population below the poverty line, mortality rates, and access to sanitation, we find that Pakistan is ahead of India. For example, about 22.6 percent of the total population lives below the poverty line in Pakistan (living at an income of less than 1 dollar a day) whereas this percentage figure for India is about 21.9 percent. China also has a low poverty ratio (15.9%). Similarly, Pakistan is ahead of India in providing improved sanitation facilities. In Pakistan, 44% of people have access to improved sanitation. These figures for India and China are 35 percent and 65 percent respectively. The maternal mortality rate (i.e., the number of women who die per one lakh births) is also high in India (200) as compared to Pakistan (260). But it is very low (37) in China. With the progress of education and health facilities throughout the world, literacy rates and life expectancy have improved a lot. India, China, and Pakistan are no exception to this rising trend. China has almost reached a life expectancy (73.7 years) around equal to the standard of the developed countries. While India (66.1 years) and Pakistan (65.1 years) are still struggling to improve their life expectancy level. Similarly, China accorded top priority to education of the masses,
India and Pakistan did not show much enthusiasm, especially
Pakistan. Among the three nations, China is the most literate country, India comes next and Pakistan is lagging behind both India and China. Though the above-mentioned indicators of human development are important these are not sufficient. Besides these, liberty indicators are no less important. In liberty indicators, measures of the extent of constitutional protection to the rights of citizens and the Rule of Law are included. The usefulness of the human development index in the absence of these indicators will be limited.
Comparison Between India’s and Pakistan’s Economy
- Both countries have mixed economy form of economic systems.
- Economic reforms were introduced in 1988 in Pakistan while India introduced reforms since 1991.
- India is ahead of Pakistan in the areas of telecommunication, information technology, and human capital formation (i.e. social development).
- Pakistan is ahead of India in the areas of urbanization and sanitation facilities.
Discuss how China is Ahead of India.
- China is more developed than India.
- China is more successful in attracting foreign direct investment than India.
- China has better infrastructure transportation, communication & internet systems, buildings, energy, and banking facilities.
- Economic reforms in China were adopted in 1978 as India introduced reforms in 1991.
- Economic reforms in China were favorable to the poor class as a result of which the poverty ratio was substantially reduced, on the other hand, economic reforms could not reduce the poverty ratio in India much.
- China focussed on investment in education and health as a result of which human development indicators are better in China compared to India.
- China and India occupy first and second place respectively in having the largest population in the world, but China has been more successful in gaining control of it.
- China has a strong export-oriented manufacturing sector whereas India is lagging.
Explain Main Features of Indian Economy
The main features of Indian economy are as follows :
- Low Per Capita Income: Barring a few countries, the per capita income of India is the lowest in the world. Though Indian economy has grown at a faster rate than the developed economies, the difference in per capita income (national income per head) is very large. In 2017, per capita income of India was $1940 which was around 30 times lower than that of the USA and 20 times lower than France.
- Predominance of agriculture: India is predominantly an agricultural economy as a high proportion of the working population is engaged in agriculture. About 47 percent of the working population depends on agriculture for their livelihoods. Agriculture contributes just 17 percent of the national income. Agriculture continues to be in a state of backwardness.
- Heavy pressure on population: The population of India (121 crore in 2011) is very large. Not only this, but the growth rate of the population is also high. Over the years, the population of India has increased by 2 percent per annum. To maintain a rapidly growing population, the requirements of food, clothing, shelter, schooling, etc. all rise.
- Presence of chronic unemployment: India is a labour-abundant country. As a result, it becomes very difficult to provide gainful employment to the entire working population. In the agricultural sector, a much larger number of laborers are engaged in production than are actually required.
- Inequalities in the distribution of income: There is an unequal distribution of national income in the country. The centralization of economic power happens to be seen in the hands of some industrial houses.
- Lack of skilled labor: In India, unskilled labor is in abundant supply but skilled labor is less due to insufficient vocational education and training.
- Deficiency of efficient entrepreneurs: For industrial development, able and efficient entrepreneurs are needed. In India, there is a shortage of effective entrepreneurs. Less industrial development is a major cause of poverty, as our industrial sector has failed to absorb surplus labor from agriculture.
- Jobless growth: Since the introduction of economic reforms in the country, the growth rate has speeded up, but expansion in employment has not occurred in conformity of this growth. Thus, employment growth has not matched production growth. For this reason, income inequality in the country has increased.
Conclusion: All the above-mentioned features indicate that India is still an underdeveloped country. Nevertheless, India is the fastest-growing economy in the world and has emerged as the sixth largest economy (after the USA, China, Japan, Germany, and the UK) in the world. The socio-economic indicators of development have shown significant improvements over the years, but it has miles to go to remove poverty, and malnutrition and provide shelter and clean drinking water to the entire population.
Conclude development Experience of India with its Neighbours :
During the last three decades, India, Pakistan, and China have performed differently. Among these nations, China performed very well. However, the lack of political freedom and its implications for human rights are its major concerns. India performed moderately. However, it has yet to build infrastructure in many parts of the country. It has also to raise the level of living of more than one-fourth of its population that has to live below the poverty line. Political instability, over-dependence on remittances, and foreign aid are major concerns for Pakistan.
The Economies of India, Pakistan, and China :
Select Indicators (2014)
|1.||National Income (a) GDP (Trillion) 2013 US $||1.9||232 Billion||9.24|
|(b) GNI Per Capita (PPP) Dollars||5497||4866|
|(c) Growth Rate||5.8||4.1||9.0|
|(d) Contribution to GDP Primary Sector Secondary Sector Tertiary Sector||17 26 57||10 47 43|
|2.||Distribution of Workforce (a) Primary Sector||34|
|(b) Secondary Sector||22||20||29|
|(c) Service Sector||27||35||37|
|3.||Demography (a) Population Size (crore)||17.9||135|
|(c) Annual Growth Rate of Population||1.26||1.68||0.49|
|(d) Density of Population||411||229||144|
|(e) Sex Ratio||940||952||950|
|(f) Infant Mortality Rate||42||70||16|
|(g) Maternal Mortality Rate||200||260||37|
|(h) Life Expectancy at birth years||68||66.2||75.8|
|(i) Total Fertility Rate||2.5||3.5||1.7|
|4.||Land Area (Sq. Kms)||3268090||803944||9561000|
|Arable Land as % of total||54%||28%||15%|
|5.||Human Development Index (Value) 2015||0.624||0.550||0.738|
- Sectral Growth: China’s growth is mainly contributed by the manufacturing sector and India’s growth by the service sector. During this period, Pakistan has shown deceleration in all three sectors.
- GDP Per Capita (PPP US $) : In 2014, China’s GDP per capita was estimated to be US $12543, while it was just US $5497 for India and US $ 4866 for Pakistan.
- People below the Poverty Line: People below the poverty line are the people who do not even have that level of income and expenditure, which is necessary to meet specified minimum levels of calorie intake. In 2015, the poverty ratio for India, China, and Pakistan were 21.9%, 15.9% and 22.6% respectively.
- HDI Values: In 2015, HDI values for India, China, and Pakistan were estimated to be 0.624(131), 0.738 (90), and 550(14) respectively.
- Expectancy at Birth: Life expectancy refers to the average number of years for which people are expected to live. A higher life expectancy indicates longer and a more active average life expectancy of 68.3 and 66.4 years respectively.
- Infant Mortality Rate (IMR): Infant mortality rate refers to the number of infants dying before reaching one year of age per 1,000 live births in a year. Low IMR denotes better health and sanitation facilities as most of the infants die due to unhygienic conditions. It is lower in China with 16 infants and highest in Pakistan with 70 infants. IMR in India is 42.
- Adult Literacy Rate: Adult literacy rate refers to the ratio of literate adult population to the total adult population (aged 15 and above) in a country. China is much ahead of India and Pakistan in terms of adult literacy rate. 94.3% of the population is literate in China, whereas it is just 62.8% in India. Pakistan has the lowest adult literacy rate with only 54.9%.
- Maternal Mortality Rate: Maternal mortality rate refers to the number of dying mothers per one lakh live births in a year. Both India and Pakistan have not been able to save women from maternal mortality. In 2015, in China, for one lakh births, only 27 women die, whereas in India and Pakistan, maternal mortality rates were 200 and 260 respectively.
- Access to improved Water Supply: It refers to the percentage of the population that has access to improved water and is able to obtain at least 20 liters per day. India (92%), Pakistan (91%), and China (92%), in providing improved water supply water sources.