Former Reserve Bank of India Governor Raghuram Rajan on Tuesday said that the Indian economy will eventually surpass China’s in size, and New Delhi will be in a better position to create infrastructure in other South Asian countries than Beijing. Rajan made the remarks at a session on Strategic Outlook for South Asia at the World Economic Forum in Davos in Switzerland, PTI reported.
“Historically, India had a bigger role in the region but China has now grown much bigger than India and has presented itself as a counter balance to India in the region,” Rajan said. “India will become bigger than China eventually as China would slow down and India would continue to grow. So India will be in a better position to create the infrastructure in the region which China is promising today.” He said the India-China competition is good for South Asia.
China is the second largest economy in the world, with a Gross Domestic Product of $12.23 trillion in 2017. India is the sixth largest, with a GDP of $2.59 trillion.
Rajan pitched for creating regional companies in South Asia. He said that banks can simply study the borrowing behaviour of South Asians and learn important lessons. The former RBI governor also called for more student exchange programmes in the region.
Rajan said consumers today gain from economies of scale as companies offer several services for free. However, he said that it needs to be known who is paying for these services, “as we know nothing is free”.
“The concern is not so much about today, but about tomorrow,” the former RBI chief said. “We need to think whether these benefits from scale would continue for the consumers. Our corporations are becoming too big to control for our political systems.”
At the event, Nepal Prime Minister KP Sharma Oli spoke about collaboration with China. “Nepal has signed connectivity agreements with China and India for waterways, roads and airways,” Oli said according to The Kathmandu Post. “We are bringing railways from India and China to Kathmandu.”