ECONOMICS ASSIGNMENT

Submitted by: Aditi Agrawal (A06)

MBA (M&S) SEC "A"

Submitted to: Dr. Jyoti Prakash

 THE CURRENT ECONOMIC FIGURES FOR FOR BRICS
(BRAZIL, RUSSIA, CHINA, SOUTH AFRICA AND INDIA)

GDP Inflation Unemployment BOP Exchange

(CPI) Rate Rate
Brazil $ 2.1 trillion 4.17% 12.3% +$5bn $0.258
Russia $1.5 trillion 2.5% 5.1% +$16.2bn $0.015

India $ 2.6 trillion 3.369% 8.8% - $149bn $0.015

China $12.24 trillion 1.77% 3.9% +$31.69bn $0.145

South 0.28 trillion 5.4% 27.1% -$0.31bn $0.068

Africa
Source: Wikipedia; Note all the figures except exchange rate belong to past year

Comparison of India and China in context of their recent

economic performance

GDP
China’s GDP growth rate has of late deaccelerated from glorious double digit growth to 6-6.5%
on account of reduced industrial output growth and trade tariffs from US against their alleged
unfair trade practices.
India continues to be largest growing economy in the world with growth rate hovering around
7% after recovering from the shocks of GST and Demonetization. India is nowhere near its
optimum growth level given the advantage of demographic dividend. Even protectionism is
bound to help Indian manufacturing industry, if government leverages it aptly by nudging the
sector. India should keep pushing more economic reforms to bring structural changes in GDP’s
composition so that unemployed labour in agriculture can mobilise into other sectors.
In absolute terms India doesn’t stand anywhere to close to china as china is 12 trillion economy
and we are just short of their one-fourth. There is lot to catch up for India.

Inflation
If we stack inflation rates of India and china against each other (3.3%V 1.7%) then one can say
that India has done fairly good job in keeping the inflation rate healthy and under control.
Healthy inflation rate are driver of economic growth as they signify that people are engaged in
buying-selling activities. On the other hand china’s slowed down economy is struggling to
prevent inflation from going further down as it might signal economic stagnation.

Unemployment Rate
India is currently staring at grave problem of providing ever increasing labour force in market
with jobs. Once touted as advantage, Demographic dividend is seemingly turning into burden on
the economy. Government needs to address this issue with utmost urgency as we can’t afford to
waste human resources and opportunity to catapult our growth.
China has comparatively low rates of unemployment and they have done it well to keep it that
low. China seems to still enjoying the status of manufacturing hub for almost every third good in
the market.

Balance of Payments
India has since independence struggled with trade balance as it has always been a net importer.
Most part of India’s import forms electronic goods, defence arms and crude oil. And on the other
hand china exceeds its imports to enjoy surplus. India must find ways to reduce its dependency
on foreign resources.
India has been striving for self-sufficiency but even in 2017 India imported more than it exported
on the other hand china enjoyed surplus of $31.69bn.

Exchange Rate
Value of china’s yuan has been weakening due its worsening trade with US and Federal Reserve’s
move of increasing interest rates. Similarly rupee hasn’t impressed at all as it on declining spree
this year with one dollar now almost 75 rupees on account of increasing oil imports, increasing
interest rates and US economy revival. Both nations have struggles but india on this front saw
unprecedented devaluation of its currency.
Devaluation of currency has repercussions on country’s import and export. And this in turn can
add to CAD (Current Account Deficit).

Other Important Indicators of Economic Performance

Following are the other economic parameter if known would have helped us in further
comparison of India and china’s economic performance in better way:
 Government borrowing/national debt
 Real disposable incomes
 Income inequality (Gini coefficient)
 Labour productivity
 Investment levels
 Measures of well-being – surveys which measure overall living standards. e.g. ONS well-
being index.
 Human development index (HDI) – a measure of economic development. It is a
composite index which includes real GDP per capita and also factors such as education,
healthcare and environmental factors.