Recently a thesis has emerged that India is poised to outpace China in the longer run due to the entrepreural nature of its growth model. China’s growth has been due to a huge amount of foreign direct investment in the last twenty years. It attracted more FDI in just one year (2002) than what India attracted in the past ten years! Foreign Policy:
This thesis goes on to suggest that an entrepreural economy will do better in the long run. While this in itself could be disputable (besides, ‘in the long run, we’re all dead’) I’m beginning to worry that this will take us back to the days of the home-grown self-sufficiency dogma. It is necessary for our entrepreneurs to see world-class competition in their own backyard. Indian industry has what it takes, but can churn out global winners only if it learns to compete even in its domestic market.
There was good news in the Asian Wall Street Journal today – the Indian economy could even grow at 8% this year. But the mindset against privatisation needs to change pretty fast if such a momentum can be sustained.