ET ANALYSIS - Should India be Compared with Indonesia Rather than China?
Kiran Kabtta Somvanshi ET Intelligence Group
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India is found to be scoring lower than Indonesia on five of the seven counts mentioned in the report
India is a lot closer to its South East Asian neighbour Indonesia when it comes to inclusive growth and development, while population seems to be the only similarity that India shares with China, shows the inaugural `Inclusive Growth and Development Report' released by the World Economic Forum on Monday, which covers 112 economies.Dubbed as a lower middle income country, India is found to be scoring lower than Indonesia on five of the seven counts mentioned in the report.China, on the other hand, is classified as an upper middle income nation and has better rates than India on all the seven criteria. The seven criteria are education and skill development, employment and labour compensation, asset building and entrepreneurship, financial intermediation of real economy investment, corruption and rents, basic services and infrastructure and fiscal transfers. Except for financial intermediation and corruption, where both countries have similar scores, India logs a lower score than Indonesia -the fourth most populous country -on all the other parameters.
India ranks at the bottom 20% among its peer group of lower middle income nations on employment and fiscal transfers, while it figures among the top 20% on corruption. China, meanwhile, figures on the top 20% in the high middle income group of countries on employment, financial intermediation and corruption issues. Indonesia ranks in the top 60-80% in education, asset building, financial intermediation and corruption. While India fares better than Indonesia on growth rates of per capita GDP and labour productivity , its poverty and public debt to GDP rates are far higher than those of Indonesia.
The South East Asian nation also fares better on income equality and global competitiveness.
The report suggests that India must take further action to ensure that the growth process is broad-based in order to expand a small middle class and reduce the share of the population living on less than $2 a day (many of them in poverty despite being employed).
Educational enrolment rates are relatively low across all levels, and quality varies greatly, leading to notable differences in educational performance cial mobility. India under exploits the use of fiscal transfers. Its income tax is regressive and social spending remains low, which limits accessibility of healthcare and other basic services.Sanitation continues to be a problem across the board.
India scores well in terms of access to finance for business development and real economy investment, yet new business creation continues to be held back by the large administrative burden of starting and running companies, corruption, and underdeveloped infrastructure, the report concludes.
Kiran.Somvanshi@timesgroup.com
India ranks at the bottom 20% among its peer group of lower middle income nations on employment and fiscal transfers, while it figures among the top 20% on corruption. China, meanwhile, figures on the top 20% in the high middle income group of countries on employment, financial intermediation and corruption issues. Indonesia ranks in the top 60-80% in education, asset building, financial intermediation and corruption. While India fares better than Indonesia on growth rates of per capita GDP and labour productivity , its poverty and public debt to GDP rates are far higher than those of Indonesia.
The South East Asian nation also fares better on income equality and global competitiveness.
The report suggests that India must take further action to ensure that the growth process is broad-based in order to expand a small middle class and reduce the share of the population living on less than $2 a day (many of them in poverty despite being employed).
Educational enrolment rates are relatively low across all levels, and quality varies greatly, leading to notable differences in educational performance cial mobility. India under exploits the use of fiscal transfers. Its income tax is regressive and social spending remains low, which limits accessibility of healthcare and other basic services.Sanitation continues to be a problem across the board.
India scores well in terms of access to finance for business development and real economy investment, yet new business creation continues to be held back by the large administrative burden of starting and running companies, corruption, and underdeveloped infrastructure, the report concludes.
Kiran.Somvanshi@timesgroup.com
