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How can India overtake China economically?

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Till 1980s, China and India were almost at same position, but after that China started to overtake India.

The first reason is Political Stability. China has one party system, no nobody questions their policies. The example of political instability in India is Maharashtra. As soon as Shiv Sena Government came in power in Maharashtra, they put a hold on Bullet Train project of the previous BJP led government.

The second reason is Infrastructure. China has invested heavily in their infrastructure, which in turns attracts FDI. Today, almost every company has a manufacturing hub in China.

The third reason is ‘Make in China’. China started their project in 1980s, whereas India started, ‘Make in India’ in 2014. It took more than 40 years for China to make their project successful. While in India, some political parties have started crying in 6 years that Make in India is a failure.

The fourth reason is mindset. China had accepted long ago that their population is so large, that not everyone would get Government jobs. So instead of encouraging their children to prepare for government jobs, they improved the skills of their younger generation, to work in industries and manufacturing sector.

At the moment only service sector of India is a bit better than China. In India, the service sector contributes to more than 60 per cent of GDP while its GDP share in China is much smaller. The reason china is an economic giant today, is because of of it’s manufacturing hub. India’s Industry sector contributes 23% to the GDP, while in China it is 40%.

India needs to focus on Industry Sector. For this, India needs to shift (skilled) labors from agriculture sector to Industry sector.

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