Chapter 10. Comparative Development Experiences of India and its Neighbours

Developmental Path
• India, Pakistan & China have many similarities in their developmental strategies. All three nations have started on their developmental path at same time.
• While India and Pakistan became independent nations in 1947, People’s Republic of China was established in 1949.
• All three countries had started planning their development strategies in similar ways.
• While India announced its first Five Year Plan for 1951–56, Pakistan announced its first five-year plan, now known as Medium-Term Development Plan, in 1956. China announced its First Five Year Plan in 1953.
• Since 2018, Pakistan is working based on 12th Five Year Development Plan [2018–23], whereas, China is working on 14th Five Year Plan [2021–25].
• Until March 2017, India has been following FiveYear Plan-based development model.
• India and Pakistan adopted similar strategies, such as creating a large public sector and raising public expenditure on social development.
• Till 1980s, all three countries had similar growth rates and per capita incomes.

• Pakistan, officially Islamic Republic of Pakistan, gained independence on 14th August, 1947.
• Pakistan follows mixed economy model with co-existence of public and private sectors.
• introduction of Green Revolution led to mechanization and an increase in public investment in infrastructure in select areas, which finally led to a rise in production of food grains. This changed agrarian structure dramatically. In 1970s, nationalisation of capital goods industries took place.
• Pakistan then shifted its policy orientation in late 1970s and 1980s when major thrust areas were denationalisation and encouragement of private sector.
• Pakistan received financial support from western nations and remittances from continuously increasing outflow of emigrants to Middle-east. This helped country in stimulating economic growth.

Demographic Indicators
• population of Pakistan is very small and accounts for roughly about one-tenth of China or India.
• Though China is largest nation and geographically occupies largest area among three nations, its density is lowest.
• Scholars point out one-child norm introduced in China in late 1970s as major reason for low population growth. They state that this measure led to a decline in sex ratio, proportion of females per 1000 males.
• One-child norm and resultant arrest in growth of population have other implications. For instance, after a few decades, in China, there will be more elderly people in proportion to young people. This led China to allow couples to have two children.
• fertility rate is low in China and very high in Pakistan. Urbanisation is high in China with India having 34% of its people living in urban areas.

• After establishment of People’s Republic of China under one-party rule, all critical sectors of economy, enterprises and lands owned and operated by individuals were brought under government control.
• Great Leap Forward [GLF] campaign initiated in 1958 aimed at industrialising country on a massive scale.
• In rural areas, communes were started. Under Commune System, people collectively cultivated lands.
• In 1965, Mao introduced Great Proletarian Cultural Revolution [1966–76] under which students and professionals were sent to work and learn from countryside.
• China introduced reforms in phases.
• During first phase, reforms were started in areas of agriculture, international trade, and investments. In agriculture, for example, communal lands were split up into small plots that were given to individual households to use but not own. After paying taxes, they could keep all of money they made from land.
• In later phase, reforms were initiated in industrial sector. Private sector firms, in general, and township and village enterprises, i.e., those enterprises which were owned and operated by local collectives, in particular, were allowed to produce goods. At this stage, enterprises owned by government [known as State-Owned Enterprises—SOEs], which we, in India, call public sector enterprises, were made to face competition.
• reform process involved dual pricing. This means fixing prices in two ways; farmers and industrial units were required to buy and sell fixed quantities of inputs and outputs based on prices fixed by government and rest were purchased and sold at market prices.
• To attract foreign investors special economic zones were set up.

Gross Domestic Product and Sectors
• China has second-largest GDP [PPP] of $22.5 trillion in world, whereas, India’s GDP [PPP] is $9.03 trillion and Pakistan’s GDP is $ 0.94 trillion, roughly about 11% of India’s GDP.
• India’s GDP is about 41% of China’s GDP.
• When many developed countries were finding it difficult to maintain a growth rate of even 5%, China was able to maintain near double-digit growth during 1980s.
• In 2015–17, there has been a decline in Pakistan and China’s growth rates, whereas, India met with a moderate increase in growth rates.
• Until 1980s, more than 80% of people in China were dependent on farming as their sole source of livelihood.
• In 2018–19, with 26% of its workforce engaged in agriculture, its contribution to GVA in China is 7%.
• In both India and Pakistan, contribution of agriculture to GVA was 16 and 24%, respectively, but proportion of workforce that works in this sector is more in India.
• In Pakistan, about 41% of people work in agriculture, whereas, in India, it is 43%. Twentyfour percent of Pakistan’s workforce is engaged in industry but it produces 19% of GVA.
• In India, industry workforce accounts for 25% but produces goods worth 30% of GVA.
• In China, industries contribute to GVA at 41 and employ 28% of workforce. In all three countries, service sector contributes highest share of GVA.
• Thus, in all three countries service sector is emerging as a major player in development. It contributes more to GVA and, at same time, emerges as a prospective employer.
• In last five decades, growth of agriculture sector, which employs largest proportion of workforce in all three countries, has declined.
• China’s growth is contributed by manufacturing and service sectors and India’s growth by service sector.
• Note – data given above is from year 2019. data may vary with time.

Indicators of Human Development
• As per data obtained from year 2017-19 China is moving ahead of India and Pakistan.
• It is true for many indicators — income indicators such as GDP per capita, or proportion of population below poverty line or health indicators such as mortality rates, access to sanitation, literacy, life expectancy or malnourishment.
• China and Pakistan are ahead of India in reducing proportion of people below poverty line and their performance in sanitation.
• But India and Pakistan have not been able to save women from maternal mortality.
• In China, for one lakh births, only 29 women die whereas, in India & Pakistan, about 133 & 140 women die respectively.
• China has smallest share of poor among three countries.

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