CBSE 2025, Set 2

Question

Read the following text carefully :

China underwent substantial policy changes to stimulate their economy. China's economic growth was rapid in the late 1970s across various sectors. However, India had to wait much longer for its economic transformation. India's significant economic progress was only realised after the economic reforms of 1991, which were implemented out of compulsion.

On the basis of given text and common understanding, compare the impact of subsequent reforms initiated by China and India.

Edvaya · Accepted Answer

The correct answer is Subjective. **China's Reforms:** China's rapid economic growth can be traced back to the *voluntarily* initiated reforms in 1978. China was able to maintain near double-digit growth during the 1980s which paved a strategic shift towards a manufacturing-driven economy. Moreover, agricultural reforms (like the household responsibility system) brought prosperity to a vast number of poor people. It fostered industrial expansion and strengthened support for further reforms. **India's Reforms:** In contrast, India was *compelled* to introduce economic reforms in 1991 due to a severe balance of payments crisis. Following the reforms, while the industrial sector reported fluctuation and sluggishness, the growth of the service sector skyrocketed. This indicates that India's subsequent GDP growth was heavily skewed and mainly driven by growth in the service sector, skipping the manufacturing-led phase seen in China.

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Economics > Indian Economic Development > Comparative Development Experiences

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