Health care is just one illustrative pressure point. Today, India has about five hospital beds per 10,000 people. The ratio in China is about eight times that, and analysts say India will take decades just to reach the level where China currently stands
A fleeting moment in western India on the evening of March 8 will remain etched in Nikita Punjabi’s memory forever: The first glimpse of her newborn daughter as the doctor held her up after delivery.
Aniket Rai, nervously waiting during the birth, cried tears of joy when the nurse told him he had a baby girl. “It was surreal feeling… Unparalleled. I cannot describe it really, it can only be felt.”
Their baby, Prisha — which means god’s gift — is but one of the millions born across India so far this year who have contributed to the historic milestone of passing mainland China’s population. That comes just a few years after India snatched the title of world’s fastest-growing major economy from its northern neighbor.
But labels alone won’t be enough for India to take over as the world’s biggest growth driver, just as having the most people wasn’t enough for China until it carried out economic reforms from the late 1970s.
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Increasing rivalry between the US and China is giving Modi’s government a new shot at boosting its manufacturing share to a targeted quarter of GDP. And there are pockets of progress.
Apple Inc.’s three key Taiwanese suppliers won incentives from India to boost smartphone production and exports. The California-based company now makes almost 7% of its iPhones in India, Bloomberg News reported recently, up from about 1% in 2021.
“The political and democratic set up in the country is more conducive for global investment than China,” said Sanjay Kumar Mohanty, a professor at the International Institute for Population Sciences in Mumbai.
But moving up the value chain won’t be easy. Labor laws are still restrictive and compared to nations like Bangladesh or Vietnam, India has been less successful in creating the highly-efficient industrial parks preferred by many global manufacturers.
Hope and Fear
Rapid progress on urbanization, infrastructure, human development and manufacturing will be needed for decades, not just years, as the population continues to swell. It’s expected to reach 1.67 billion by 2050 — that’s another 250 million people, or roughly the size of Indonesia.
Health care is just one illustrative pressure point. Today, India has about five hospital beds per 10,000 people. The ratio in China is about eight times that, and analysts say India will take decades just to reach the level where China currently stands.
The demographic window won’t be open forever either. India’s population could start declining in 2047 and fall to 1 billion people by 2100, according to UN estimates.
The UN’s base case sees China’s population at 1.3 billion by 2050. Unlike demographers, economists tend to avoid forecasting decades into the future, so it’s tough to find any estimates of India overtaking China’s GDP. But if India can keep growing at around 7% and its currency holds firm, it should zoom past Germany and Japan to a third place ranking by 2030.
For the Modi administration, there is no doubt this is India’s moment.
With 1.428 billion people, India has passed mainland China’s population, which stands at 1.425 billion, according to UN data released Wednesday. The nation will soon overtake China and Hong Kong combined.
“This is not just about beating our chest on rankings, in the end it is about providing a better quality of life for all Indians and also to create a system which allows for innovation, risk taking, entrepreneurship and so on,” said Sanjeev Sanyal, an economic adviser to Modi.
Baby Prisha’s parents are also optimistic.
“Our country is seeing such fast-paced growth,” said Rai, an assistant vice president at Barclays who plans to raise his family in the city of Pune. “It’s a great era for Prisha to have been born.”
Bloomberg