NCERT Textbook: Comparative Development Experiences of India & its Neighbours | Economics Class 12 - Commerce PDF Download

 Page 1


DEVELOPMENT EXPERIENCES OF INDIA: A COMPARISON
WITH NEIGHBOURS
UNIT
III
UNIT
IV
2024-25
Page 2


DEVELOPMENT EXPERIENCES OF INDIA: A COMPARISON
WITH NEIGHBOURS
UNIT
III
UNIT
IV
2024-25
In today’s globalised world, where geographical
boundaries are slowly becoming meaningless, it
is important for neighbouring countries in the
developing world to understand the development
strategies being pursued by their neighbours. This
is more so because they share the relatively limited
economic space in world markets. In this unit, we
will compare India’s developmental experiences
with two of its important and strategic neighbours
— Pakistan and China.
2024-25
Page 3


DEVELOPMENT EXPERIENCES OF INDIA: A COMPARISON
WITH NEIGHBOURS
UNIT
III
UNIT
IV
2024-25
In today’s globalised world, where geographical
boundaries are slowly becoming meaningless, it
is important for neighbouring countries in the
developing world to understand the development
strategies being pursued by their neighbours. This
is more so because they share the relatively limited
economic space in world markets. In this unit, we
will compare India’s developmental experiences
with two of its important and strategic neighbours
— Pakistan and China.
2024-25
134 INDIAN ECONOMIC DEVELOPMENT
After studying this chapter, the learners will
• figure out comparative trends in various economic and human
development indicators of India and its neighbours, China and Pakistan
• assess the strategies that these countries have adopted to reach their
present state of development.
COMPARATIVE
DEVELOPMENT EXPERIENCES OF  INDIA
AND ITS NEIGHBOURS
8
2024-25
Page 4


DEVELOPMENT EXPERIENCES OF INDIA: A COMPARISON
WITH NEIGHBOURS
UNIT
III
UNIT
IV
2024-25
In today’s globalised world, where geographical
boundaries are slowly becoming meaningless, it
is important for neighbouring countries in the
developing world to understand the development
strategies being pursued by their neighbours. This
is more so because they share the relatively limited
economic space in world markets. In this unit, we
will compare India’s developmental experiences
with two of its important and strategic neighbours
— Pakistan and China.
2024-25
134 INDIAN ECONOMIC DEVELOPMENT
After studying this chapter, the learners will
• figure out comparative trends in various economic and human
development indicators of India and its neighbours, China and Pakistan
• assess the strategies that these countries have adopted to reach their
present state of development.
COMPARATIVE
DEVELOPMENT EXPERIENCES OF  INDIA
AND ITS NEIGHBOURS
8
2024-25
135 COMPARATIVE DEVELOPMENT EXPERIENCES OF INDIA AND ITS NEIGHBOURS
8.1 INTRODUCTION
In the preceding units we studied the
developmental experience of India in
detail. We also studied the kind of
policies India adopted, which had
varying impacts in different sectors.
Over the last two decades or so, the
economic transformation that is taking
place in different countries across the
world, partly because of the process
of globalisation, has both short as
well as long-term implications for
each country, including India. Nations
have been primarily trying to adopt
various means which will strengthen
their own domestic economies. To this
effect, they are forming regional and
global economic groupings such as
the SAARC, European Union,
ASEAN, G-8, G-20, BRICS etc. In
addition, there is also an increasing
eagerness on the parts of various
nations to try and understand the
developmental processes pursued by
their neighbouring nations as it
allows them to better comprehend
their own strengths and weaknesses
vis-à-vis their neighbours. In the
unfolding process of globalisation,
this is particularly considered
essential by developing countries as
they face competition not only from
developed nations but also amongst
themselves in the relatively limited
economic space enjoyed by the
developing world. Besides, an
understanding of the other economies
in our neighbourhood is also required
as all major common economic
activities in the region impinge on
overall human development in a
shared environment.
In this chapter we will compare the
developmental strategies pursued by
India and the largest two of its
neighbouring economies—Pakistan
and China. It has to be remembered
that despite being endowed with vast
natural resources, there is little
similarity between the political power
setup of India - the largest democracy
of the world which is wedded to a
secular and deeply liberal Constitution
for more than half a century, and the
militarist political power structure of
Pakistan or the command economy
of China that has only recently
started moving towards a democratic
system and more liberal economic
restructuring respectively.
8.2 DEVELOPMENTAL PATH—A
SNAPSHOT VIEW
Do you know that India, Pakistan and
China have many similarities in their
developmental strategies? All the three
nations have started towards their
developmental path at the same time.
While India and Pakistan became
independent nations in 1947, People’s
Republic of China was established in
1949. In a speech at that time,
Geography has made us neighbours. History has made us friends. Economics
has made us partners, and necessity has made us allies. Those whom God has
so joined together, let no man put asunder.
John F. Kennedy
2024-25
Page 5


DEVELOPMENT EXPERIENCES OF INDIA: A COMPARISON
WITH NEIGHBOURS
UNIT
III
UNIT
IV
2024-25
In today’s globalised world, where geographical
boundaries are slowly becoming meaningless, it
is important for neighbouring countries in the
developing world to understand the development
strategies being pursued by their neighbours. This
is more so because they share the relatively limited
economic space in world markets. In this unit, we
will compare India’s developmental experiences
with two of its important and strategic neighbours
— Pakistan and China.
2024-25
134 INDIAN ECONOMIC DEVELOPMENT
After studying this chapter, the learners will
• figure out comparative trends in various economic and human
development indicators of India and its neighbours, China and Pakistan
• assess the strategies that these countries have adopted to reach their
present state of development.
COMPARATIVE
DEVELOPMENT EXPERIENCES OF  INDIA
AND ITS NEIGHBOURS
8
2024-25
135 COMPARATIVE DEVELOPMENT EXPERIENCES OF INDIA AND ITS NEIGHBOURS
8.1 INTRODUCTION
In the preceding units we studied the
developmental experience of India in
detail. We also studied the kind of
policies India adopted, which had
varying impacts in different sectors.
Over the last two decades or so, the
economic transformation that is taking
place in different countries across the
world, partly because of the process
of globalisation, has both short as
well as long-term implications for
each country, including India. Nations
have been primarily trying to adopt
various means which will strengthen
their own domestic economies. To this
effect, they are forming regional and
global economic groupings such as
the SAARC, European Union,
ASEAN, G-8, G-20, BRICS etc. In
addition, there is also an increasing
eagerness on the parts of various
nations to try and understand the
developmental processes pursued by
their neighbouring nations as it
allows them to better comprehend
their own strengths and weaknesses
vis-à-vis their neighbours. In the
unfolding process of globalisation,
this is particularly considered
essential by developing countries as
they face competition not only from
developed nations but also amongst
themselves in the relatively limited
economic space enjoyed by the
developing world. Besides, an
understanding of the other economies
in our neighbourhood is also required
as all major common economic
activities in the region impinge on
overall human development in a
shared environment.
In this chapter we will compare the
developmental strategies pursued by
India and the largest two of its
neighbouring economies—Pakistan
and China. It has to be remembered
that despite being endowed with vast
natural resources, there is little
similarity between the political power
setup of India - the largest democracy
of the world which is wedded to a
secular and deeply liberal Constitution
for more than half a century, and the
militarist political power structure of
Pakistan or the command economy
of China that has only recently
started moving towards a democratic
system and more liberal economic
restructuring respectively.
8.2 DEVELOPMENTAL PATH—A
SNAPSHOT VIEW
Do you know that India, Pakistan and
China have many similarities in their
developmental strategies? All the three
nations have started towards their
developmental path at the same time.
While India and Pakistan became
independent nations in 1947, People’s
Republic of China was established in
1949. In a speech at that time,
Geography has made us neighbours. History has made us friends. Economics
has made us partners, and necessity has made us allies. Those whom God has
so joined together, let no man put asunder.
John F. Kennedy
2024-25
136 INDIAN ECONOMIC DEVELOPMENT
Jawaharlal Nehru had said, “These
new and revolutionary changes in
China and India, even though they
differ in content, symbolise the new
spirit of Asia and new vitality which is
finding expression in the countries in
Asia.”
All three countries had started
planning their development strategies
in similar ways. While India
announced its first Five Year Plan for
1951–56, Pakistan announced its first
five year plan, now called the Medium
Term Development Plan, in 1956.
China announced its First Five Year
Plan in 1953. Since 2018, Pakistan is
working on the basis of 12th Five Year
Development Plan (2018–23), whereas,
China is working on 14th Five Year
Plan (2021–25). Until March 2017,
India has been following Five Year
Plan- based development model. India
and Pakistan adopted similar
strategies, such as creating a large
public sector and raising public
expenditure on social development.
Till the 1980s, all the three countries
had similar growth rates and per capita
incomes. Where do they stand today
in comparison to one another? Before
we answer this question, let us trace
the historical path of developmental
policies in China and Pakistan. After
studying the last three units, we
already know what policies India has
been adopting since its Independence.
China: After the establishment of
People’s Republic of China under one-
party rule, all critical sectors of the
economy, enterprises and lands owned
and operated by individuals were
brought under government control.
The Great Leap Forward (GLF)
campaign initiated in 1958 aimed at
industrialising the country on a
massive scale. People were encouraged
to set up industries in their backyards.
In rural areas, communes were
started. Under the Commune system,
people collectively cultivated lands. In
1958, there were 26,000 communes
covering almost all the farm
population.
GLF campaign met with many
problems. A severe drought caused
havoc in China killing about 30 million
people. When Russia had conflicts with
China, it withdrew its professionals
who had earlier been sent to China to
help in the industrialisation process.
In 1965, Mao introduced the Great
Proletarian Cultural Revolution
(1966–76) under which students and
professionals were sent to work and
learn from the countryside.
The present day fast industrial
growth in China can be traced back to
the reforms introduced in 1978. China
introduced reforms in phases. In the
initial phase, reforms were initiated in
agriculture, foreign trade and
investment sectors. In agriculture, for
instance, commune lands were divided
into small plots, which were allocated
(for use not ownership) to individual
households. They were allowed to keep
all income from the land after paying
stipulated taxes. In the later phase,
reforms were initiated in the industrial
sector. Private sector firms, in general,
and township and village enterprises,
i.e., those enterprises which were
owned and operated by local collectives,
in particular, were allowed to produce
2024-25