India to overtake China in 2020

It's very difficult to predict which economy will rise several years down the road. There are too many variables to consider. Having said that I think it's safe to say the US will be a much bigger economy than either China or India in decades to come and longer.

While India has vastly developed compared to how it was a couple of decades ago, it does not live up to the "India Shining" propaganda. Having visited there several times over the years, it's infrastructure is still pitiful - on par with the least developed nations on Earth. Even countries like Colombia and Egypt have better roads, electricity and water supply.

While China is far ahead of India, I think the ground realities there are far from rosy. My Chinese friend tells me of the problem of getting paid. Apparently this is a pervasive problem throughout society ranging from salaries to contractual obligations. And he tells me almost half of the glass and steel structures in Shanghai and Beijing are vacant. They're just building and building in order to create jobs. Also, I read in the Economist that the growth rates claimed by Chinese are vastly overinflated and not subject to verification. China is not the garden variety free economy we are familiar with and nobody can predict how things will unfold there.

So I think India is hobbling under the weight of it's own corruption and virtually unmanageable as a country while China is over managed - two ends of the spectrum. This is why I think the good old USA will be number one for the forseeable future.
 
Because India's infrastructure is not develop yet, gives a plain simple reason for growth in the economy when big investments are made and lots of jobs are created.


Also, India's growth is more related to internal demand coming out of its own population. BPO and exporting makes less than 10-15% of the Indian economy.

In the Chinese case atleast half of the demand and growth is related to exporting items to US and other nations.
 
Why I am Bullish on India Economy

India is 1/10 th the size of US economy and EU economy and yet holds far more promise and resillience than both these economies combined. While the world focuses on Chinese growth albeit with skepticism and caution at the numbers being thrown out, no such aspersions have ever been cast at India. Indian growth has been a transparent and extremely well led, consumer and infra story.

Indian Equity Markets have outperformed almost all markets in the world climbing an astounding 6x over its 2003 Sensex number. Mind you India is a trillion dollar economy and therefore these numbers dont reflect a low base effect and hence should be treated with respect.

India GDP records a steady growth of 8% while having kept inflation well under check, any central banks dream. India GDP growth was among the least levered and hence there is tremendous scope for further growth.

There was a time in Indian history when India was at the verge of default of its IMF loans and narrowly escaped by pledging its gold in 1990. That was a turning point in India’s financial reform as the erstwhile Finance Minister Man Mohan Singh opened India’s gate to liberalisation thus ushering in an era of growth and poverty alleviation.

India’s powerful growth was ushered in by a wave of Foreign direct Investment which played a critical role in providing the much needed equity and capital for expansion. India credit and debt markets are among the least developed in the world and hence were not capable of handling such growth.

India experienced three high level growth sectors in the last 5 years first of which was automobiles. India automobiles ownership went from 5.9 million to 9.78 million nearly doubling in the process.

Every Country has one sector which leads its growth. While Technology played a great role in India growth in 1995-2003 era, it was Telecom that led all sectors in 2003-2008 era. India subscriber base grew from 3 million to 510 million in Nov 2009. While Internet tried to make its head way into India, it is India massive mobile penetration that sets it apart. I believe very strongly that any business that cannot take advantage of the massive 510 million subscriber base will be missing out a great opportunity to make returns.

Much to the delight of the rest of the world, India continues to churn out among the highest tonnage of farm produce. While there has been a stagnation over the last 12 months which was mainly cause of adverse weather condition and credit blockage to agri sector, we believe farm production should come back to normal in the next few years. Marc Faber believes the agriculture sector is the best place to invest over the next 5 years.

Led by India booming economy, India’s social spending has kept pace with education and health spending reaching a peak of 2.32% of the GDP in 2010. That estimates the market to about $30 billion.

http://www.marketoracle.co.uk/Article16165.html
 
As a Chinese, I don't really care whether it will be US, India or China to be no 1 (in GDP). I just care whether my living standard will improve.

If the Chinese can't move up the ladder and develop its own technology, it would still be good for US to remain strong and creative and take lead in creating nice things like Google, iPhone, etc. If India can do better then let it be.

This is a global village. Being no 1 is not so important. If someone else is better than me, takes the lead and makes my life better than I have no complaint.
 
Quote from TimeCorrosion:

In my opinion, we in the US are under an invisible or indirect slavery, not much different from the colonial times.

Taxation: The ultimate slave master is the IRS, which owns 40% of my hard labor.
More...

Unfortunately there's not many places on earth where "freedom" also equates financial freedom.

Even Hong Kong, a bona fide society, is placed on several "tax haven" blacklists around the world, simply because an average hongkonger pays ~10% of their income as tax, total.

Compare it to the 40-60% in much of the western world, and slavery is indeed what our lovely "free" democracies have become.

The problem with democracy is, that nobody ever thought to include a tax ceiling. Thus govt people and anybody dependant on them (whether by welfare or dealings) are free to vote themselves ever increasing amount of working people's money, until the whole shit collapses (very likely) or people get enlightened enough to stop it (very unlikely).
 
As an Indian i can tell you that India will not be taking over the Chinese economy anytime soon. The chinese have had a 30 years head start so they are leaps ahead at the moment. Now about indians bieng risk averse yes its true but it was more true of the older generations. The current generation especially in the cities is a lot more adventerous. The economic growth in the past 2 decades is due to the business men who despite rampant political corruption have done well. The culture is rapidly changing in the cities and it will eventually translate in the rural areas as well. You can see the culture by the movies that they watch. In the past indian movies were about poverty and nowadays they are about getting rich fast. The mentality is changing for the better.

Furthermore i agree with others on the forum that homogeneous nature of China is a strength rather than a weakness. However, with their wealth China is also becoming aggressive in the region. They have made their intentions well known in regards to north western Indian territory for example. I think they are making a mistake by acting like a supreme world power when they are not. They are no USA and wont be for a 100 years plus they are surrounded by large countries like Russia, Japan (usa), and india. Making way too many enemies politically.


I would further like to add that India is not all about poverty that you see in western media. Yes there is a big portion of the population which resembles slumdog millionaire but there is also hundreds of millions of other people who have more savings than an average family in USA. Its true people so get educated. India has a long way to go and is held back by corruption, lack of education, and etc. I'm no dreamer but i also see the improvements in the infrastructure and economy,
 
India is still a healty land... Tigers, elephants, lions, the book of the jungle... I mean the nature world is still alive ! Some natural land are intact... that will be the greatest wealth of India...

In China there is only the Panda... and some Camel...

Furthermore I think that the rate of the pollution of the country waters and soils will be a major indicator in the next few years...
 
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