19-11-2012, 02:33 PM
Five Differences Between India and China
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The India-China economy comparison is inevitable in any business conference. As the head of IDFC, Lall talked about India’s infrastructure issues by comparing it to China’s.
Indian government finances 50% of its infrastructure projects. Therefore, India is not as highly levered as China where the govt only invests 16% from the budget and 54% is funded by debt from banks and private sector. However, India has very high subsidies and inefficient distribution system and hence loss-making operations. For e.g. 45% of the total power distributed is lost due to theft (illegal tapping of power lines).
In India, only 44% villages have power. Farmers enjoy subsidies, and power is delivered for free to villages. On the other hand, 99% of China’s villages are powered. Rural taxes are often higher than those in urban areas.
Said Lall, India’s biggest challenge – Leadership. Enough said!