Indian Economy and Policy

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INDIAN ECONOMY AND POLICY

Assignment 1b

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This essay is aimed at comparing India with China, Germany and The United States of America across several pillars of economy as stated in the World economic forum. The analysis is done on the basis of data available in the World Economic Forum website.

Overall performance:

India ranks 55th as opposed to China in 28th place, Germany in 4th place and the United States of America in the 3rd place. These rankings have been derived after an analysis of all the pillars of economy and how far they have developed in each of these countries. The GDP (PPP) per capita are 14107.43, 46893.17, 55805.20 and 6161.62 USD for China, Germany, USA and India respectively. This shows that the comparatively high population of China and India are the factors that reduce the average purchasing power and production capacity of these countries overall. The comparison of India with other countries based on the economic pillars is given below.

Note: All the points on these factors in on a 7 point scale.

Pillar 1: Institutions

China: 4.1, Germany: 5.2, USA: 4.8 and India:4.1

It can be seen that India and China fares far behind Germany and USA. This can be attributed to the liberal government that Germany and USA have had for a longer period of time compared to the short span of liberal government that China and India have had. With the growth rate that India and China are having at present, it can be made sure that India can easily reach the other countries on this pillar with proper government subsidies for new institutions that would facilitate the growth of Indian economy.

Pillar 2: Infrastructure

China: 4.7, Germany: 6.1, USA:5.1 and India: 3.7

It can be seen Germany fares far ahead of the other countries in this regard it can be attributed to the smaller size of the nation that makes it easy to implement and govern infrastructure projects. India lags far behind, this can be attributed to the corruption that was highly prevalent in the country that made the funds insufficient for projects as they were eaten up by government officials. India should make a corruption free system and allow states to govern these projects and submit reports of these projects for easier governance.

Pillar 3: Macroeconomic environment

China: 6.5, Germany: 6.0, USA: 4.3 and India:4.4

The high macroeconomic environment of China and Germany can be attributed to the high manufacturing outsourcing to China and high industrial production in Germany.  India fares far behind China and Germany but slightly better than USA in this regard. India can improve this condition by taking measures to collect taxes effectively that could increase the effective cash reserves with the government that can appreciate the value of Indian Rupees across other currencies.

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