Buoyed by country’s robust growth prospects, Chief Economic Advisor Kaushik Basu today exuded confidence that India could clock a higher growth rate than China in the next three to four years.
“I think we (India and China) are very close in terms of growth rate now. Within the next 3—4 years, for us to overtake the growth rate of China is possible,” Mr. Basu said at a CII post—Budget conference here.
India economy is estimated to grow 8.6 per cent in the current fiscal and up to 9.25 per cent in 2011—12.
In the last three months of 2010, the domestic economy expanded 8.2 per cent while China grew 9.8 per cent during the same period.
Earlier this year, the World Bank projected that Indian economy would overtake that of China - on purchasing power parity (PPP) basis - by 2012.
According to Mr. Basu, it might take time before India could overtake China in terms of per capita income, especially since the neighbouring nation’s per capita income is three times more than India.
In 1978, the per capita income of both countries were the same, he added.
World Bank in its report had projected Indian economy to grow by 8.7 per cent in 2012, faster than 8.4 per cent expected for China.
However, these projections were based on PPP basis, which means that purchasing power of currencies are taken into account for measuring economic growth.
Currently, the size of Indian economy is USD 1.3 trillion while that of China is worth USD 5.5 trillion. Few weeks back, China also emerged as the world’s second largest economy, toppling Japan.