India Vs China - An Infrastructure Comparison[/b]
Infrastructure in general may be defined as the basic physical and organizational structure needed for the operation of a society or an enterprise or services and facilities necessary for an economy to function. These functions include roads, water supply, power grids, telecommunication, airports, railways, water and sanitation and irrigation
Why is this Comparison Necessary?[/b]
India and China fight the political war over the boundaries through their economies. China’s growth after being in a similar state is a model for India to follow. Both the countries have same demographic dividends.Two of the most fastest growing markets in the world.
China Years ahead of India in development[/b]
Chinese reforms occurred in two stages
Late 1970s
? Decollectivization of agriculture, opening up to foreign investment, permission of entrepreneurs to set up business
1980s and 1990s
? privatization and contracting out of much state-owned industry and the lifting of price controls, protectionist policies, and regulations
Economic Liberalization in India
? opening for international trade and investment, deregulation, initiation of privatization, tax reforms
A few facts about India’s Infrastructure[/b]
? India expects to invest about $500 bn in infrastructure, mainly in power, telecommunication, roads, railways and oil pipelines, in the five years ending March 2012.
? India will need to spend more than $1 trillion on infrastructure from 2010 to 2019, with roads requiring $427 billion, power $288 billion and railways $281 billion, according to Goldman Sachs.
? 7.5 percent of GDP is invested in infrastructure, with plans to increase that to about 10 percent at the end of the 2008-2012 five-year plan.
? Private investment is likely contribute 36 percent to total infrastructure investment by 2008-2012 five-year plan, up from 25 percent from the 2002-2007 period
? India will issue tax-free infrastructure bonds with a minimum tenure of 10 years, which will have the potential to raise about $6.5 billion in fiscal year 2010/11
A few facts about China’s Infrastructure[/b]
? China spends 11% of its GDP on infrastructure.
? Spending on infrastructure has been increasing at rate of around 25 percent a year in recent years.
? 38% of China’s huge 2008-9 economic stimulus package will go towards public infrastructure projects, including railway, road, irrigation, and airport construction.
? China budgeted 80 billion yuan (US$11.8 billion) on transportation infrastructure in 2010.
? 170 new mass-transit systems could be built in China by 2025.
Infrastructure Comparison in key Sectors[/b]
? Transport[/b]
? Telecommunication[/b]
? Health Services[/b]
? Energy[/b]
? Defense[/b]
Transport[/b]
China runs 91,000 km of train tracks, compared with India's 63,327 km, and both the state-owned behemoths are their country's single largest employer. The Indian Railways pay roll has over 1.6 million entries. China's Ministry of Railways employs nearly 3.2 million people, more than the country's 2.3 million army troops. India continues to import technology, such as coaches whereas China has CSR as world's third-largest high-speed train producer. Only 3-4 Indian cities have mass rapid transit system whereas China has same in 12 cities which include systems like subway, light rail, tram and maglev. China latest fast train, the CRH380A, set a new record on December 3, 2010 by clocking 486.1 kms an hour in its Beijing to Shanghai trial. India's fastest trains, the Rajdhani and Shatabdi categories, average about 100 km per hour on their better days China's Railway Ministry plans to nearly double the high-speed rail network for its sleek bullet trains to 13,000 kms by 2012. In the same year, India hopes only to start basic work on its first high-speed rail track between New Delhi and Mumbai. China's Railway Ministry plans to nearly double the high-speed rail network for its sleek bullet trains to 13,000 k, by 2012. In the same year, India hopes only to start basic work on its first high-speed rail track between New Delhi and Mumbai .
Roads[/b]
China’s road network is second largest in the world (4,008,200 km) whereas India’s road network comes next (3,320,410 km). The density of India’s highway network is at 0.66 km of highway per square km much greater than China's (0.16). The total length of China's expressways was 74,000 kilometres whereas India has approximately 600 km expressways. China’s National Highways cover a distance of 130,000 km while India’s National Highways measure over 70,934 km.
Airports[/b]
India has 128 airports, including 15 international airports. Indian airports handled 142 million passengers in 2010-11 and 1.6 million tonnes of cargo in year 2009-10. The dramatic increase in air traffic for both passengers and cargo in recent years has placed a heavy strain on the country's major airports .Passenger traffic is projected to grow more than 15% annually over 2011-13 and it is estimated that the aviation industry, currently 9th largest in the World, will require 30 billion USD investment in the next 15 years to keep pace with the growing demand.
China has 467 airports. In 2007, China's airport passenger throughput and cargo volume reach, respectively, 405.7 million passengers and 8.83 million tons. China plans to raise the total number of civil airports to 244, including 97 new airports before 2020. In Northern region (Beijing, Tianjin, Hebei, Shanxi, Inner Mongolia, Liaoning, Jilin, Heilongjiang).
Telecommunications[/b]
India has more than 672 million telecom subscribers whereas China has 842 million subscribers (largest in the world). India has 12 players in total, China has only two. China has teledensity of over 80 percent, India stands at 67.67 percent. China has a local telecom equipment market with companies like Huawei and ZTE competing globally. In China support is given to indigenous R&D by providing public funding. In India it’s still proposed. The Trans-Pacific Express is a telecommunications project to connect the United States with China with a fiber-optic cable designed to meet increasing internet traffic between the regions .
Healthcare[/b]
By 2012, India’s healthcare sector was projected to grow to nearly $40 billion. This translates to $34 per capita, or roughly 6% of GDP. The Indian pharmaceutical market is one of the fastest growing markets in the world; sales increased by 17.5% to $7.3 billion in 2006. China’s total health spending as a share of GDP increased from 3.3 percent to nearly 5.5 percent(2002). Both the Chinese and Indian governments started with the good intention of assuring affordable access to basic health care for low-income populations
Defense Comparison[/b]
China spent $78.63 billion on its armed forces last year whereas India’s defense budget for 2010-11 was $33.20 billion. China is miles ahead of India’s nuclear forces. The stockpile of China is estimated to have 200-400 active nuclear warheads. In comparison, India’s strategic nuclear force is estimated to have stockpiled about 50-70 nuclear warheads.
“One of the critical constraints which holds back our growth rate is really the quality of infrastructure. If you compare infrastructure in India with infrastructure in East Asia . . . [our]infrastructure is poorer, and that reflects the fact that we haven't invested nearly as much as we should have in the past several years.” –
Deputy Chairman of India's Planning Commission - Montek Singh Ahluwalia
It has been seen from the previous crisis of Latin America and East Asian crisis that to manage the ever increasing fiscal deficit, government invariably cuts the public spending in the infrastructure, which has proved to be a wrong policy move as it only prolongs the recessionary period.
Million dollar question arises – “How to lead the growth story for India in the coming decade?”
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[/b]
[/b]
Infrastructure in general may be defined as the basic physical and organizational structure needed for the operation of a society or an enterprise or services and facilities necessary for an economy to function. These functions include roads, water supply, power grids, telecommunication, airports, railways, water and sanitation and irrigation
Why is this Comparison Necessary?[/b]
India and China fight the political war over the boundaries through their economies. China’s growth after being in a similar state is a model for India to follow. Both the countries have same demographic dividends.Two of the most fastest growing markets in the world.
China Years ahead of India in development[/b]
Chinese reforms occurred in two stages
Late 1970s
? Decollectivization of agriculture, opening up to foreign investment, permission of entrepreneurs to set up business
1980s and 1990s
? privatization and contracting out of much state-owned industry and the lifting of price controls, protectionist policies, and regulations
Economic Liberalization in India
? opening for international trade and investment, deregulation, initiation of privatization, tax reforms
A few facts about India’s Infrastructure[/b]
? India expects to invest about $500 bn in infrastructure, mainly in power, telecommunication, roads, railways and oil pipelines, in the five years ending March 2012.
? India will need to spend more than $1 trillion on infrastructure from 2010 to 2019, with roads requiring $427 billion, power $288 billion and railways $281 billion, according to Goldman Sachs.
? 7.5 percent of GDP is invested in infrastructure, with plans to increase that to about 10 percent at the end of the 2008-2012 five-year plan.
? Private investment is likely contribute 36 percent to total infrastructure investment by 2008-2012 five-year plan, up from 25 percent from the 2002-2007 period
? India will issue tax-free infrastructure bonds with a minimum tenure of 10 years, which will have the potential to raise about $6.5 billion in fiscal year 2010/11
A few facts about China’s Infrastructure[/b]
? China spends 11% of its GDP on infrastructure.
? Spending on infrastructure has been increasing at rate of around 25 percent a year in recent years.
? 38% of China’s huge 2008-9 economic stimulus package will go towards public infrastructure projects, including railway, road, irrigation, and airport construction.
? China budgeted 80 billion yuan (US$11.8 billion) on transportation infrastructure in 2010.
? 170 new mass-transit systems could be built in China by 2025.
Infrastructure Comparison in key Sectors[/b]
? Transport[/b]
? Telecommunication[/b]
? Health Services[/b]
? Energy[/b]
? Defense[/b]
Transport[/b]
China runs 91,000 km of train tracks, compared with India's 63,327 km, and both the state-owned behemoths are their country's single largest employer. The Indian Railways pay roll has over 1.6 million entries. China's Ministry of Railways employs nearly 3.2 million people, more than the country's 2.3 million army troops. India continues to import technology, such as coaches whereas China has CSR as world's third-largest high-speed train producer. Only 3-4 Indian cities have mass rapid transit system whereas China has same in 12 cities which include systems like subway, light rail, tram and maglev. China latest fast train, the CRH380A, set a new record on December 3, 2010 by clocking 486.1 kms an hour in its Beijing to Shanghai trial. India's fastest trains, the Rajdhani and Shatabdi categories, average about 100 km per hour on their better days China's Railway Ministry plans to nearly double the high-speed rail network for its sleek bullet trains to 13,000 kms by 2012. In the same year, India hopes only to start basic work on its first high-speed rail track between New Delhi and Mumbai. China's Railway Ministry plans to nearly double the high-speed rail network for its sleek bullet trains to 13,000 k, by 2012. In the same year, India hopes only to start basic work on its first high-speed rail track between New Delhi and Mumbai .
Roads[/b]
China’s road network is second largest in the world (4,008,200 km) whereas India’s road network comes next (3,320,410 km). The density of India’s highway network is at 0.66 km of highway per square km much greater than China's (0.16). The total length of China's expressways was 74,000 kilometres whereas India has approximately 600 km expressways. China’s National Highways cover a distance of 130,000 km while India’s National Highways measure over 70,934 km.
Airports[/b]
India has 128 airports, including 15 international airports. Indian airports handled 142 million passengers in 2010-11 and 1.6 million tonnes of cargo in year 2009-10. The dramatic increase in air traffic for both passengers and cargo in recent years has placed a heavy strain on the country's major airports .Passenger traffic is projected to grow more than 15% annually over 2011-13 and it is estimated that the aviation industry, currently 9th largest in the World, will require 30 billion USD investment in the next 15 years to keep pace with the growing demand.
China has 467 airports. In 2007, China's airport passenger throughput and cargo volume reach, respectively, 405.7 million passengers and 8.83 million tons. China plans to raise the total number of civil airports to 244, including 97 new airports before 2020. In Northern region (Beijing, Tianjin, Hebei, Shanxi, Inner Mongolia, Liaoning, Jilin, Heilongjiang).
Telecommunications[/b]
India has more than 672 million telecom subscribers whereas China has 842 million subscribers (largest in the world). India has 12 players in total, China has only two. China has teledensity of over 80 percent, India stands at 67.67 percent. China has a local telecom equipment market with companies like Huawei and ZTE competing globally. In China support is given to indigenous R&D by providing public funding. In India it’s still proposed. The Trans-Pacific Express is a telecommunications project to connect the United States with China with a fiber-optic cable designed to meet increasing internet traffic between the regions .
Healthcare[/b]
By 2012, India’s healthcare sector was projected to grow to nearly $40 billion. This translates to $34 per capita, or roughly 6% of GDP. The Indian pharmaceutical market is one of the fastest growing markets in the world; sales increased by 17.5% to $7.3 billion in 2006. China’s total health spending as a share of GDP increased from 3.3 percent to nearly 5.5 percent(2002). Both the Chinese and Indian governments started with the good intention of assuring affordable access to basic health care for low-income populations
Defense Comparison[/b]
China spent $78.63 billion on its armed forces last year whereas India’s defense budget for 2010-11 was $33.20 billion. China is miles ahead of India’s nuclear forces. The stockpile of China is estimated to have 200-400 active nuclear warheads. In comparison, India’s strategic nuclear force is estimated to have stockpiled about 50-70 nuclear warheads.
“One of the critical constraints which holds back our growth rate is really the quality of infrastructure. If you compare infrastructure in India with infrastructure in East Asia . . . [our]infrastructure is poorer, and that reflects the fact that we haven't invested nearly as much as we should have in the past several years.” –
Deputy Chairman of India's Planning Commission - Montek Singh Ahluwalia
It has been seen from the previous crisis of Latin America and East Asian crisis that to manage the ever increasing fiscal deficit, government invariably cuts the public spending in the infrastructure, which has proved to be a wrong policy move as it only prolongs the recessionary period.
Million dollar question arises – “How to lead the growth story for India in the coming decade?”
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