January 14, 2011
The World Bank has pegged Indian economic growth to take over Chinese by 2012 on purchasing power parity (PPP) basis, but New Delhi has played down the projection by the multi-lateral agency saying the country is not in race with anyone.
In its latest report on Global Economic Prospects, the World Bank has projected Indian economy to grow by 8.7 per cent in 2012, faster than 8.4 per cent expected for China.
However, these projections are based on PPP basis, which means that purchasing power of currencies are taken into account for measuring economic growth.
As such, these projections are not the traditional way of measuring the economic growth.
Reacting to the World Bank projections, Finance Minister Pranab Mukherjee said, "India is trying (to achieve high growth rate), but I am not going to compete with anybody."
He said every country is trying hard to overcome the economic crisis and reach a desired level of growth.
"Nothing wrong in it," he added. He said India wants to record double-digit growth with moderate inflation and fiscal prudent policies.
"We want to reach double-digit growth, at the same time having modest rate of inflation without indulging in fiscal profligacy, that means with prudent fiscal management," Mukherjee said.
Indian and Chinese economies are not comparable. The size of Indian economy is $1.3 trillion and Chinese economy is worth $5.5 trillion.