Reverse Causality...
But,
1980s india has edge over china in infrastructure , china had none
glittering infrastructure.
In 1989 india had a longer network of paved road 1.4Mn Kms compared to
china had 0.862 Mn Kms and railway network of 60000 kms in india and
china had 46000 kms,in terms of qualified good railway system say
electrified only 1700kms compared to india 5345kms
Today, gap between india and china about economic performance is being
narrowed substantially bu t in 1980s there was no questions that put out
superior performance GDP per capita average more than 8% in china in
real & compare to in india only 3%(Hindu rate of growth) , thus if we look
at these countries in 80s there is no evidence that the country with an
infrastructure had edge to necessarily grow faster .
we can see that many world class infrastructure built in china during last
20 years when its growth rate is close to 10%.
so we can say growth is the main reason who leads us towards the
growth not viseversa ,
same story can be with FDIs in 1980s china attracted vely little FDI but it
was able to grow fast After about 15 years Foreign investors being
convinced about CHINESE growth ..and begun to pour money into country.
Amartya sen the noble laureate of economy have gave best treatment
on this topic in
But union government has long term and structural deficit in its budget
and it has to pick its spending priorities wisely.