India growth set to outpace China
India seems poised to outpace China as the world’s fastest-growing major economy in 2011, with Beijing lowering its economic growth target to 7% over the next five years to ease pressures on the environment.
China has grown at an annual average of 10.4% during the last decade.
China’s projection contrasts with estimates unveiled in India’s Budget, with the economy forecast to expand between 8.75% and 9.25% in 2011-12 on the back of strong domestic consumption and an investment boom despite high inflation.
Chinese Premier Wen Jiabao said during an online chat with the public on Sunday, “We'll never seek a high economic growth rate and size at the cost of the environment as that would result in unsustainable growth with industrial overcapacity and intensive resource consumption.”
A day later, finance minister Pranab Mukherjee laid down a medium-term roadmap to clock an annual 9% GDP growth rate. He said fiscal consolidation and reforms would be critical to achieve this rate on a sustainable basis. A senior finance ministry official said that though crude oil prices are firming up, the situation is being monitored and there is no immediate cause for worry.
The Chinese government’s economic blueprint for 2011-2015 — similar to India’s five-year plans — is to be placed before China's parliament later this week.
“The Chinese economy is three times our size. So, overtaking China will not happen overnight and to do that we need not only grow at a higher level and reach a double-digit mark soon but also sustain it at that level,” Chandrajit Banerjee, director-general, Confederation of Indian Industry told HT. However, India has the potential backed by strong fundamentals to achieve double-digit growth in the near future, he added.
The Indian economy grew at more than 9% through 2004 to 2008 before slowing down to 6.8% in 2009 as ripples of the global credit crisis hit domestic demand. It has since staged a smart recovery and is projected to grow at 8.6% in 2010-11.