Ch-13 Development experience of India, Pakistan and China- A comparative study

India, China and Pakistan have similar physical endowments and are neigbouring countries with totally
different political systems. India has the largest democracy of the world whereas Pakistan has militarist
political power structure and China has the command economy.

A. Strategy of growth of India, Pakistan and China:-

 India, Pakistan and China have similarities in their development strategies.
 All the three nations started towards their developmental path at the same time.
 While India and Pakistan became independent nations in 1947, People‘s Republic of China was
established in 1949.
 All the three countries had started planning their development strategies in similar ways- while India
announced its first five year plan in 1951, Pakistan announced its first five year plan now called medium
term developmental plan in 1956. China announced its first five year plan in 1953.
 Indian and Pakistan adopted similar strategies, such as creating a large public sector and raising
expenditure on social development.
 Till the 1980‘s, all the three countries had similar growth rates and per capita incomes.
B. Growth story of China:-
 People‘s Republic of China was established and the country was regulated by government. All the
enterprises and land owned by individuals are brought under the control of government.
 The economy was agrarian, but the Great Leap Forward campaign was initiated in 1958 to foster
industrialization.
 It encouraged people to set up industries in their backyard.
 In rural areas, communes were started. Under the commune system, people collectively cultivated lands. In
1958 there were 26000 communes covering almost all the farm population.
GLF campaign met with many problems:-
 A severe drought caused havoc in China killing about 30 million people.
 When Russia had conflicts with China, it withdrew its professionals who had earlier been sent to
China to help in the industrialization process.

 In 1965, Mao introduced the Great Proletarian Cultural Revolution (1966-76) under which students and
professionals were sent to work and learn from country side.
 China‘s present rapid industrial growth can be traced back to its reforms in 1978.
 China introduced reforms in phases.
Initial phase Later phase
 Reforms were initiated in agriculture,  Reforms were initiated in industrial sector.
foreign trade and investment sectors.  Private sectors were allowed to produce goods.
 For example:- in agriculture , commune  At this stage enterprises owned by government
lands were divided into small plots, were allowed to face competition.
which were allocated to individual  The reform process also involved dual pricing.
households. Producers were supposed to sell fixed amount of
 They were allowed to keep all income quantity at fixed price decided by government
from the land after paying stipulated whereas rest of the quantities could be sold at
taxes. market price.
 SEZ were set up to attract foreign investors.

 However, in recent past, GDP growth in China has slowed down. some of the reasons are:-
 Demand of Chinese products has reduced in global economies.
 Chinese economy slowed down because of less domestic investment.
 Chinese people were migrating to other countries in search of skilled job opportunities.
 Environmental degradation was a concern in China because more industries were set up and were
causing serious challenge of sustainable development.
C. Growth story of Pakistan:-
 Pakistan adopted various economic policies similar to those adopted by India.
 Pakistan also followed mixed economy model with co-existence of public and private sectors.
 In the late 1950‘s and 1960‘s Pakistan introduced various policies. Such as tariff protection for
manufacturing of consumer goods together with direct import controls on competing imports.
 The introduction of Green Revolution changed the agrarian sector. It led to increase in public investments
in infrastructure which finally led to a rise in the production of food grains.
 In the 1970‘s nationalization of capital goods industries took place. Pakistan then shifted its policy and
introduced denationalization on encouragement of private sector.
 They received financial support from western countries and also financial support to private sector from
government.
 In 1988 Pakistan introduced economic reforms.
 In Pakistan the reform process led to worsening of all the economic situations.
The reasons for slow down of growth and reemergence of Poverty in Pakistan‘s economy are:-
 Agricultural growth and food supply situation were based not on an institutionalized process of
technical change but on good harvest. When there was a good harvest, the economy was in good
condition, when it was not, the economic indicators showed stagnation or negative trends.
 If a country is able to build up its foreign exchange earnings by sustainable export of manufactured
goods, it need not worry. In Pakistan, most foreign exchange earnings came from remittances from
Pakistani workers in the Middle-East and the exports of highly volatile agricultural products.
 There was also growing dependence on foreign loans on one hand and increasing difficulty in paying
back the loans on the other.

D. Economic Development Indicators of India, China and Pakistan:-

1. Salient Demographic Indicators of India, China and Pakistan:-
Select Demographic Indicators, 2015
Country Population Density Annual Sex ratio Fertility rate urbanisation
Growth of
population
India 1311 441 1.2 929 2.3 33
China 1371 146 0.5 941 1.6 56
Pakistan 188 245 2.1 947 3.7 39

 China has the highest population followed by India. If we look at the global population, out of every six
persons in the world one is Indian and another is Chinese. The population of Pakistan is very small
accounts for roughly about one-tenth of China or India.
 China is the largest nation and geographically occupies largest area but its population density is the lowest.
 The population growth is highest in Pakistan followed by India and China. Major reason for low population
growth in China was ‗One Child Policy‘ norm initiated in late 1970‘s.
 Sex ratio is low in all the three countries. Preference for sons, in all these countries is the reason for low
sex ratio.
 The fertility rate is also low in China and very high in Pakistan.
 Urbanization is high in China with India having 33% of its people living in urban areas.
2. GDP growth rate trends in India, China and Pakistan:-
Annual growth of GDP (in %), 1980-2017
Country 1980-90 2015-17
India 5.7 7.3
China 10.3 6.8
Pakistan 6.3 5.3

 China has the second largest GDP of $ 19.8 trillion whereas India and Pakistan‘s GDP is $8.07 and $0.97
trillion.
 When many countries were finding it difficult to maintain a growth rate of even 5%, China was able to
maintain near double digit growth rate for one decade.
 In the 1980‘s, Pakistan was ahead of India, China was having double-digit growth and India was at the
bottom.
 In 2011-15, there has been a decline in China‘s growth rates whereas, Pakistan met with drastic decline at
4%. Some scholars hold economic reforms in 1988 and political instability responsible behind the trend.
3. Sectoral contribution towards GDP in India, China and Pakistan
Sector India China Pakistan
Agriculture 17 9 25
Industry 30 43 21
Services 53 48 54
Total 100 100 100
 Share of agriculture sector:- In China, the contribution of agriculture to GDP was 9% in 2015-17, in India it
was 17% and in Pakistan, it was 25%.
 Share of Manufacturing and service sector:- In all three economies, the industry and service sectors
contribute more in terms of output. In China, manufacturing and service sectors contribute the highest to
GDP at 43% and 48% respectively whereas in India and Pakistan, it is the service sector which contributes
the highest by more than 50% of GDP. The contribution of Industries to GDP is at 30% in India and 21 %
in Pakistan.
4. Sectoral share of employment in India, China and Pakistan
Sector India China Pakistan
Agriculture 42.7 17.5 42
Industry 23.8 26.5 3.7
Services 33.5 56 54.3
Total 100 100 100
 In China, only 17.5% of the workforce was engaged in agriculture in 2015-17.
 But the proportion of workforce that works in this sector is more in India.
 In Pakistan, 42 % of people work in agriculture sector whereas in India it is 42.7%
 In all three countries workforce in Industry and Services sectors is less.
 In China, workforce in service sector is high as compared to India and Pakistan.
5. Development of India, China and Pakistan with respect to indicators of human development:-
Item India China Pakistan
HDI 0.64 0.75 0.56
Rank 130 86 150
Life expectancy 68.8 76.4 66.6
Years of schooling 6.4 7.8 8.6
GDP per capita 6427 15309 5035
BPL 60.4 23.5 46.4
Infant mortality rate 34.6 8.5 64.2
Maternal mortality rate 174 27 178
Improved sanitation 44.2 75 58.3
Improved water sources 94 96 91
Undernourished children 37.9 8.1 46.4
 China is moving ahead of India and Pakistan. Two indicators are there that is Income indicator and
Health indicator.
 Pakistan is ahead of India in reducing BPL and also in sanitation. India has largest share of poor among
three countries.
 Neither of these two countries-India and Pakistan have been able to save women from maternal
mortality.
Liberty indicator:- It represents the degree of social and political freedom to individual in a country.