Is India Really Competing with China on a Macro Economic Base

Macroeconomics has been aptly defined as ¡°the study of the major economic ¡®totals¡¯ or aggregates-- total production (GNP), total employment and unemployment, the average price level of all goods and services, the total money supply, and others¡± (Gordon, 1978). The word macro is derived from the Greek word macros meaning largeThe economy of India has seen rapid growth in recent years. Spurred by good domestic demand, steady and significant reforms, lower crude prices and increased skilled labor India is the fastest growing economy among the BRICS nations. Another Asian country which is also in the fast lane with respect to macroeconomic growth is China. China¡¯s growth has primarily been attributed to a sharp sustained increase in productivity accompanied by increase in capital accumulation, improved infrastructure and cheap labor force (Hu & Khan, 1997).Both India and China have emerged as significant forces in the global economy over the last two decades. Both countries are geographically very large and have a huge population. Both countries have also achieved remarkable rates of economic growth and poverty reduction since 1980,with India doubling its per capita GDP and China posting a seven fold increase in its per capita GDP (Bosworth & Collins, 2008) .A PWC report titled ¡°World in 2050¡± predicts China and India to be world leading powerhouse economies by 2050.