Can the lumbering elephant overtake the hyperactive dragon?
As China grew by double-digits decade after decade for nearly 40 years, economists kept claiming the bubble would burst, that data was doctored by smart statisticians in Beijing – but the metaphorical dragon continued to grow bigger and bigger defying all expectations. The economy of India, on the other hand, started accelerating from the early 1990s onwards as Delhi loosened bureaucratic controls over industry, trade and services. In the middle of the 1990s, for the first time since India became independent in August 1947, the country’s economy expanded by an annual average of more than 9% four years in succession, that is until the impact of the ongoing international recession saw the Indian economy decelerate. Economists argue that one reason why India’s economy can grow faster than that of China in the near future is simply on account of what statisticians describe as a “base effect”. Following this argument, India’s growth rate is higher because the base on which the rate is calcu
