China beats India by a huge margin

In PPP terms, by 2018, Chinese economy will be more than $20 trillion

China’s economy, which was smaller than India’s in the 1980s, has raced ahead since, showed a study by CRISIL Research. It led to higher reduction of poverty in China than India. Car sales in the neighbouring country have also zoomed past that of India.

CRISIL’s latest study showed India's economy was 1.75 times bigger than China's in 1960. In fact, by 1980 as well, India's economy was $0.3 trillion, while Chinese was only $0.2 trillion on a purchasing power parity (PPP) basis.

However, by 2013, the Chinese economy had become 2.7 times India’s. By 2018, the Chinese economy will be more than $20 trillion (PPP), while India’s will not even touch $8 trillion, the study noted.

For obvious reasons, this has also led to higher per capita income in China. China achieved the per person income of $9,000 plus on PPP basis in 2012 compared to $3,000 in India. This has also led to faster reduction of poverty in China than India. For example, the proportion of the people under the poverty line was higher than India by over 10 percentage points in 1994. While China had close to 60 per cent of population under the poverty line, half of the population was poor in India then.

By 2009, India's poverty ratio was over 20 percentage points higher than China's. Close to 33  per cent of population was poor in India, while around  12 per cent of  population was under poverty line in China.

China's faster movement than India's is also seen in the number of car sales. In 2003, car sales in China zoomed past India's by 2.1 million. By 2010, the difference rose to 7.5 million. “As a result of higher sales, cars per 1,000 persons in China was nearly 2.6 times India's,” the study noted.