In Shanghai and Beijing I was impressed by the absence of signs of poverty (no street children, no beggars) but on the drive to the Great Wall what surprised me was that living standards in the villages we passed seemed not that different from that Indian villages.

It turns out that our own aam aadmi might be better off. As Saubhik Chakrabarti pointed out in this newspaper last week “the share of consumption in India’s GDP is a little over 60 percent, for China the figure is around 38 per cent.”

That is a staggering difference if you consider that India began its economic reforms nearly fifteen years after China and it is only now that we are beginning to see the benefits of restricting the state’s role in industry and commerce.

The Chinese economy has been showing double-digit growth rates for years while we have only just begun to escape the damage done by all those decades when the economy grew at 2 per cent, thanks to the “commanding heights” being in the hands of bureaucrats and politicians of socialist bent.

The result of those decades of socialism was that by the early nineties India was broke, mostly illiterate and desperately poor. Poverty remains our most shaming problem. If we are not yet winning this war it is because we refuse to accept the need for drastic administrative and social sector reforms. We will not be able to end rural poverty until we begin by accepting that the instruments that we are using to fight this war are outdated, unwieldy and leak like sieves.

... contd.