Fed up with the stagnation and chaos suffered under Mao Zedong, China's communist bosses began loosening their control of the economy in the late 1970s. They freed rural Chinese to till their own land or leave the interior provinces in search of work. They created economic zones free of heavy bureaucratic control in coastal cities, where new jobs flourished. When the Government closed thousands of rusting state factories, millions of fired workers poured into the burgeoning private sector.
India has never risked anything like mass firings and large-scale migration to promote growth, in large part because its democratic leaders fear that voters would punish them for the short-term upheaval and pain. India has thus seen a much more gradual shift from rural to urban, farm to factory, state to private sector, than China has. Most Indians still live and work on a farm; the population is about 70 per cent rural. Booming new cities are as rare in India as they are common in China. Many business sectors in India remain largely owned and operated by the inefficient state.
India has tinkered with free-market reform, but only under pressure from economic crises, not as a steady long-term strategy. In his first term as prime minister, Modi continued on a path of gradual change, acceptable to the countless communities in India's fractured electorate. He has not even pushed to privatise the bloated state banks, which are a major obstacle to faster growth.
Already, one outcome of the 2019 election (now in the midst of a five-week voting period) is entirely predictable, based on the party manifestos recently released by Modi and the main opposition parties. Instead of economic reform, the manifestos offer handouts that will leave the overburdened state less money to invest in roads, ports and electricity plants.
The world's most populous nations have chosen fundamentally different paths: Free-market communism in China, state-dependent democracy in India.
Does this suggest that India would be better off under an autocratic government? Not at all. For every authoritarian success story such as China's, there are multiple failures — in Cuba, in Venezuela, in North Korea. China got lucky with strong economic leadership. It is an exceptional case, not a model.
Centralised rule is particularly ill-suited to India, where many of the 29 states see themselves almost as separate countries. Whenever prime ministers try to concentrate power in Delhi, as Indira Gandhi did in the 1970s, they have triggered a backlash, often spurred by state leaders.
India is more a continent than a country, its states more varied in language, culture and ethnicity than the nations of Europe.
Its economy is best managed one state at a time, by a democratic leader close to local conditions.
There is still reason to believe in India's economic prospects, but hope won't come from the prime minister's office in Delhi; it will come from dynamic chief ministers in the state capitals. These figures often double as leaders of their own regional parties. At the moment, the conventional wisdom is that Modi and his party are likely to return to power but with fewer seats in parliament, which would leave him more dependent on regional leaders.
That would not be a bad outcome. India is better off accepting its exuberantly diverse and democratic nature, and giving its state leaders more authority to govern themselves, than trying to be the next China.
