


. . . and it’s India. It’s impossible to tell exactly when a country’s population surpasses that of another, but if India hasn’t surpassed China already, it certainly will soon.
The New York Times today asks the trillion-dollar question: “India Is Passing China in Population. Can Its Economy Ever Do the Same?”
India currently has the fifth-largest economy in the world, with a GDP of over $3 trillion. China’s is nearly $18 trillion. So, India won’t be surpassing China economically anytime soon — but could it ever?
Economic growth can compound, and the last four decades have seen China use that math to its advantage. However, between the consequences of its current authoritarianism (in restricting business and trade) and that of its past (in the immutable effects of the one-child policy), China is going to have a tough time going forward.
India, on the other hand, has a fairly normal demographic profile that will allow its population to grow at a healthy pace. There’s more good news on the economic front:
Among major economies, India’s is projected to be the fastest-growing this year, with the World Bank expecting it to expand 6.3 percent in the new fiscal year after a sharp downturn early in the pandemic. A rapid increase in public investment is still improving the country’s lagging infrastructure. It has multiple dazzling tech start-up scenes and a technologically savvy middle class, and its unique system of digital public goods is lifting up the marginalized. Its culture, from popular films to a rich tradition of music, will only grow in influence as it expands its reach to new audiences.
Specific sectors are doing well:
Where India has found success is in the higher-value range of services. Companies like Tata Consultancy Services have become world leaders, while plenty of multinational firms like Goldman Sachs have more of their global staff working from India than anywhere else in the world.
The current government is helping India catch up on infrastructure development:
India has quintupled its annual spending on roads and railways during [Prime Minister Narendra] Modi’s nine years in power. In some weeks, he has been able to preside over ribbon cuttings at a new airport, a new highway and a new rail service.
But that same government has partly impeded the openness that a growing economy needs to thrive:
As Mr. Modi has boxed in opponents, cowed the press and overwhelmed independent elements of civil society, his government has lashed out at expressions of concern from abroad as evidence of a colonial plot to undermine India or a lack of understanding of India’s “civilizational” approach — both elements that diplomats had long heard in China’s own defensiveness.
All the while, the increasing militancy of his Hindu nationalist supporters, as arms of the state hang back and give perpetrators a free pass, exacerbates India’s religious fault lines and clashes that threaten to disrupt India’s rise.
India also faces steep job-availability challenges. Civil-service jobs are still seen as the most prestigious and stable jobs in the country, and there aren’t nearly enough of them to go around. This shows up in the demand for coaching for the civil-service exam:
Dhananjay Kumar, who runs a coaching center in Bihar, India’s poorest state and its youngest, with a median age of 22, estimated that 650,000 students will apply for just 600 or 700 jobs in the national civil service this year. The civil service is a tiny part of the work force, but it is prestigious — in part because it comes with job security for life. Most applicants spend years, and a big chunk of their family’s savings, and still fail to make the cut.
Mr. Kumar’s own parents worked on a small farm and never learned to read or write. After excelling in school, he trained for the civil service exams but ended up landing work overseas, at Lloyds Bank in Britain, after learning computer coding along the way.
He sees the irony in his current business endeavor, training others for a line of work that did not pan out for himself.
“Here there is no enterprise, no companies,” Mr. Kumar said. For any young person, “the question comes, ‘What next? What can I do?’”
There are also massive differences between regions in India:
When Gayathri Rajmurali, a local politician from the southern state of Tamil Nadu, found herself in India’s north for the first time this year, the disparity shocked her. “The north, they are behind 10 to 15 years to our places,” she said, pointing to indicators like basic infrastructure and average income.
China, which also has enormous regional disparities, is no different in this last regard. But it poses different problems in India, since it’s a democracy with a federalist form of government.
One thing India absolutely must do is remove the residual aspects of its socialist past that weren’t removed in the economic reforms of the early ’90s under Prime Minister P. V. Narasimha Rao. India’s relatively positive economic position is in large part due to Rao’s reforms, but there’s still much to be done. Labor markets don’t just need to be deregulated; they need to be decriminalized. The economy can’t be so reliant on massive conglomerates that are cozy with government, and the rule of law must be strengthened to reduce corruption.
These are difficult tasks, but growth is rarely easy. A prosperous and growing India would provide a flawed-but-still-democratic counterweight to China in Asian geopolitics, but the more important effect would be lifting hundreds of millions of people out of poverty. All the best to the world’s new most populous country.