Bottoms up versus top down
India is a bottoms up story, while China is a more top down story. GDP figures can hide more than they reveal, nonetheless provide useful pointers. GDP growth rate in China has been driven by centrally commanded infrastructure spending, while the Indian GDP growth is driven by robust domestic aggregate non-commanded demand fueled by rising incomes. An additional interesting factor is that the India growth story is driven by rural and non-main urban centers, a factor which will be explored in this article subsequently.
The Indian growth process is chaotic with a garrulous democracy arguably slowing down progress. The Chinese growth story appears orderly and disciplined – the country resembling a well run machine. To quote from an article Contest of the Century in The Economist,
“Autocrats in Beijing are contemptuous of India for its messy, indecisive democracy. But they must see it as a serious long-term rival—especially if it continues to tilt towards America.”
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