Taj Mahal at Sunset. By Francisco Martins.
Economists have long said that India’s economy will some day grow faster than China’s. Will 2012 be that turning point? This year, the World Bank expects China’s economy to slow down to 8.7% from 10% last year as the government seeks to unwind fiscal stimulus, place restrictions on overheating sectors and tighten monetary policy.
In its recently released report Global Economic Prospects, the Washington-based lender also pegged the Indian economy to expand 8.7% this year, or 0.3% faster than China. These projections, however, have been made based on the purchasing power parity (PPP) basis, which takes into account purchasing power across currencies. China, on its part, expects its GDP to grow 9.5% this year, according to a report by a government think tank.
Playing down the significance of those projections, Indian finance minister Pranab Mukherjee said, “India is trying (to achieve high growth rate), but I am not going to compete with anybody… We want to reach double-digit growth, at the same time having modest rate of inflation without indulging in fiscal profligacy, that means with prudent fiscal management.”