08-20-2005, 06:40 AM
`Big investment key to growth in China'
Special Correspondent
HYDERABAD: Jayati Ghosh of the Centre for Economic Studies and Planning, New Delhi, has said the difference in the political structures of China and India was responsible for the variation in the developmental pattern of the two countries.
Delivering the second CESS (Centre for Economic and Social Studies) Silver Jubilee Lecture here on Thursday, Prof. Jayati Ghosh said the Chinese development trajectory needed a different lens to study.
Economic growth in the neighbouring country was mostly driven by large-scale investment by the State. This year the country had allotted 42 per cent of the GDP. For infrastructure alone 19 per cent was allotted. Though India too adopted liberalisation, emphasis on industry was less here.
India's economic diversification was also less impressive which was not the case in China, which had now made it the world's workshop.
Its labour came cheap was notional as low wages were cross subsidised by the State subsidised in food, housing and transport.
State provision of these aspects could naturally sustain a labour force on low wage. Again, the human development index in China was much better with crucial variables ensured greater attention.
Compared to these factors, democracy itself had a peculiar economic implications for India, she said.
The country could not go in for extreme policies due to the checks and balances that were inherent to its nature.
Perhaps, a bold expansionary policy was needed to make giant strides, she felt.
S. Mahendra Dev, director, CESS, introduced the guest and C.H. Hanumantha Rao, chairman, presided.
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Special Correspondent
HYDERABAD: Jayati Ghosh of the Centre for Economic Studies and Planning, New Delhi, has said the difference in the political structures of China and India was responsible for the variation in the developmental pattern of the two countries.
Delivering the second CESS (Centre for Economic and Social Studies) Silver Jubilee Lecture here on Thursday, Prof. Jayati Ghosh said the Chinese development trajectory needed a different lens to study.
Economic growth in the neighbouring country was mostly driven by large-scale investment by the State. This year the country had allotted 42 per cent of the GDP. For infrastructure alone 19 per cent was allotted. Though India too adopted liberalisation, emphasis on industry was less here.
India's economic diversification was also less impressive which was not the case in China, which had now made it the world's workshop.
Its labour came cheap was notional as low wages were cross subsidised by the State subsidised in food, housing and transport.
State provision of these aspects could naturally sustain a labour force on low wage. Again, the human development index in China was much better with crucial variables ensured greater attention.
Compared to these factors, democracy itself had a peculiar economic implications for India, she said.
The country could not go in for extreme policies due to the checks and balances that were inherent to its nature.
Perhaps, a bold expansionary policy was needed to make giant strides, she felt.
S. Mahendra Dev, director, CESS, introduced the guest and C.H. Hanumantha Rao, chairman, presided.
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