India can catch up China's economic growth

India can catch up China’s economic growth

The Asian Development Bank (ADB) economist Ifzal Ali said in his statement that India will catch up with China by 2020 in terms of economic growth by virtue of better efficiency of its investments. He also pointed out that the current volume of investment in India could not be compared with that in China. The volume of investment in China was 40% of the GDP (Gross Domestic Product) while it was just 22% in India. However, the efficiency of investments in India is higher than in China. Moreover, India has a comparative advantage over China in the service sector, which is 50% of the GDP in India against 22% of the GDP in China. Currently, India's GDP constitutes half of China's GDP and this will keep on for the next 5-10 years. However, when China's economic growth rate will start to decline, India's will pick up. Thus, India will catch up with China by 2020.