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In what ways has India begun to improve its attractiveness for foreign investment?
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India has shown improvements in education and infrastructure, and companies are increasingly looking for alternatives to China.
What were some of the foundational advantages that China had over India in the late 1970s?
Chinese workers had better basic education, which helped attract foreign factories and empowered entrepreneurship.
How did economic liberalization differ between China and India in the 1980s?
China allowed private entrepreneurs and foreign firms, and effectively utilized an investment-led growth model, whereas India struggled with corruption and inefficiencies despite similar liberalization.
Why is it unrealistic for India to expect a China-style economic miracle?
Systemic issues in local governance and the complexity of replicating China's growth model make similar rapid growth unrealistic for India.
Why did India's attempt at growth through investments run into issues compared to China's success?
India's attempts were marred by issues like corruption and inefficiency, unlike China's focused and well-directed investment strategy.
Explain how democratic challenges impact local governance in India's economic framework.
Poor services cause wealthier citizens to exit public systems, and political priorities may shift focus from essential services to overly ambitious projects.
Discuss the role of local governments in China's economic success.
Local officials were incentivized to grow the economy by building infrastructure and facilitating business, creating a local environment for successful partnerships.
What role did education play in differentiating China’s economic trajectory from India’s?
Better educated Chinese workers in the late 1970s attracted foreign firms needing skilled labor, fostering earlier economic engagement with global markets than India.
How does India's political system pose challenges to implementing long-term economic strategies?
As a 'precocious democracy,' divisive politics and prioritization of visible projects can detract from comprehensive long-term planning.
Why was Foreign Direct Investment (FDI) more successful in China than in India?
China successfully attracted FDI by building conducive infrastructure and partnerships, while India faced inefficiencies from local government regulations.
Identify two key reasons for the dysfunction in India's local governments.
Understaffing and the lingering effects of the caste system affect effective policy implementation and governance.
What is an investment-led growth model, and how did it benefit China?
It focuses on directing investments into infrastructure and productive assets, stimulating economic growth. Local banks in China efficiently allocated credit to these areas.
How does the caste system, despite being outlawed, still affect local governance and economic development in India?
It influences recruitment and service delivery, leading to disadvantaged economic management and governance practices.
What changes may help India to achieve steady economic growth despite not replicating China's model?
Improvements in education, infrastructure, governance, and a coalition government encouraging collaboration could help.
What insights do economists Professor Raghuram Rajan and Professor Davesh Kapur provide about India's economic prospects?
They indicate optimism for India's future growth opportunities while acknowledging systemic challenges that differ from China's path.
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