The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.
Abhishek Jain, MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur
With one week left for the union budget to be released, business leaders and economists are eager to dissect its details. While comparing to its high octane neighbor China, India has been perpetually criticized for being lacking the efficiency of implementing the reforms. Partly this phenomenon is attributed to the democracy and our 24/7 long discussions. Even the mandate that PM Modi enjoys in Lok Sabha seems too insufficient of saving him from the parliamentary opposition, in the attempt ease the Indian economy for foreign investment.
But this distinction between these two Asian giants should not be limited to mere numbers and state of current affairs. This comparison is driven by far more complicated factors. In the current tumultuous situations, where both China and India faces immense pressure on the internal economic structure, the Indian way of doing things seems more appropriate compared to the central power concentrated structure of China.
For an example when we compare the banking sectors of the two countries merely watching the numbers Indian banks seems to be doing pretty bad with their bad debts standing at 5.1% of the total compared 1.7 of China. But on a closer look, this difference testifies the sterner approach RBI showcases in its policies. Experts believe that Central bank of China might not be in that audacious attitude to shed light on a Bank Crisis. What Chinese banks are doing is a phenomenon known as “Evergreening”, where a bank gives fresh loans to moribund companies so that they can older debts.