Key Points

Countries compare development strategies to understand their own strengths and weaknesses, especially as developing nations compete in the global market. This chapter compares India with its neighbours, China and Pakistan.

India, Pakistan, and China started their development paths around the same time. India and Pakistan became independent in 1947, while the People's Republic of China was established in 1949.

All three countries initially adopted Five-Year Plans for development. India began in 1951, China in 1953, and Pakistan in 1956. They also focused on creating a large public sector and social development.

Initiated in 1958, the GLF aimed to rapidly industrialize China through backyard industries and rural communes for collective farming. The campaign met with many problems, including a severe drought.

China initiated market-oriented reforms in 1978, starting with agriculture and foreign trade. Later phases focused on the industrial sector, private firms, and establishing Special Economic Zones (SEZs).

Pakistan followed a mixed-economy model, initially with import substitution. In the late 1970s, it shifted towards denationalization and encouraging the private sector, supported by foreign remittances.

Economic reforms were initiated first in China in 1978, on its own accord. Pakistan followed in 1988 and India in 1991, both largely due to pressure from international agencies.

China and India have the largest populations, while Pakistan's is about one-tenth of either. Pakistan has the highest population growth rate, while China has the lowest due to its past one-child policy.

Introduced in the late 1970s, this policy significantly slowed population growth but also led to a decline in the sex ratio and concerns about an aging population in the future.

China has the second-largest GDP (PPP) in the world, followed by India and then Pakistan. China maintained near double-digit growth for decades, while India's growth has been more moderate.

In all three nations, the service sector is the largest contributor to GDP. However, China's industrial sector is significantly stronger and contributes more to its GDP than in India or Pakistan.

India has the highest proportion of its workforce in agriculture (46 percent). China has successfully shifted its workforce more towards industry and services, with services being the largest employer.

China followed a traditional development path, shifting its workforce from agriculture to manufacturing and then to services. India and Pakistan experienced a more direct shift from agriculture to the service sector.

China is ahead of India and Pakistan on most human development indicators, including HDI rank, life expectancy, and GNI per capita. Pakistan's performance is the lowest among the three.

China's success is attributed to pre-reform investments in health and education, land reforms, and a phased, experimental approach to reforms. It used the market system to create opportunities while retaining state control.

Scholars attribute Pakistan's slower growth and re-emergence of poverty to political instability, over-dependence on foreign aid and remittances, and volatile agricultural performance.

While comparing development, it is important to consider 'liberty indicators' like democratic participation and constitutional rights. These are not fully captured in standard HDI, where India has an advantage over China.