Economic Growth Between China And India Essay

Sanskar Israni

21/10/2016

Comparison of economic growth between CHINA and INDIA

Economic growth rate :

INDIA- 7.56% (2016)

CHINA-6.70% (2016)

Economic growth is an increase in the total output (GDP) of the economy. It occurs when a society acquires new resources or when it learns to produce more by using existing resources and only if the quantity or quality of resources increases. Due to rise in quantity of resources , there will be a rise in the net investment or size of labour force . the quality of resources will increase due to improvements in education , training and technology. Economic growth may increase living standards of people living in the country . usually rich countries who are economically grown , people there tend to have better living standards – increased life expectancy ,

as entrepreneurs will be discouraged to produce , there will be less domestic production in the country and there will be more imports making the BOP imbalanced and increasing the inflation .

• The money to be invested in other areas of the economy will be spend on people having low income .

Advantages-

• Low poverty. Living standards of the people will increase . Economic growth may rise

• Higher aggregate demand as the people will have money , they will tend to spend more hence encouraging forms to produce more and increasing GDP and growth rate of the country .

• People may be encouraged to startup their business which will give rise in the economic growth.

Countries having large population can have income unequally distributed as government will not be able to divide the income equally in large population . India is a good example of a country with large population having unequal distribution of income . India is a country which follows capitalism and where there is uneven distribution of income , every individual has to work for himself to create health China follows communism where wealth is distributed as per need and ability