Superpower ? the amazing race between China's hare and India's tortoise

In his career as a journalist and one of India's top entrepreneurs, Raghav Bahl has often faced a barrage of questions from visiting business-people bewildered by India: Why are Indian regulations so weak and confusing? Why is your foreign investment policy so restrictive? How come your hotels are world-class, when the roads leading to them are so pot-holed? Why don't you lower your voice when you make fun of your politicians? Why do you control the price of oil and cable TV? How is it that you speak such good English?

Inevitably, the questions are followed by the observation: But, you know, that's not the way it is in China.

Indeed, even as the dragon and elephant economies are together projected to dominate the world in a matter of decades, there is a palpable difference in the way China and India work on the ground. China is spectacularly effective in building infrastructure and is currently investing almost half its GDP; it is crafting a new economic idiom that has stood textbook wisdom on its head. Meanwhile, India is the classic example of a promising' economy: more than half its GDP is consumed by its billion-plus population; half its population is younger than twenty-five, giving it a unique demographic advantage; 350 million Indians understand English, making it the largest English-using country in the world; and it is. of course, the world's largest democracy.

In the race to superpower status, who is likely to breast the tape-China's hare or India's tortoise? China's awe-inspiring sweep, compared to India's relatively mild rise, could tempt an easy answer. But history unfolds over time, and Bahl argues that the winner of the race with the biggest stakes ever might not be determined by who is investing more and growing faster today, but by something slightly more intangible -who has superior innovative skills and more entrepreneurial savvy and is grappling with and expanding in the most intensely competitive conditions. China and India were the quickest to bounce back after the Lehman crisis. China's rebound, however, was accompanied by huge debt and deflation, as prices (and therefore demand) were weak. India's turnaround was sturdier, caused by lower debt and modest inflation. So India's nominal GDP grew twice as fast as China's for a few quarters on the trot the first time that this happened in nearly three decades. This could be a 'lead indicator', as could the fact that in contrast to China's yuan, which is globally pummelled for being artificially undervalued, India's rupee largely floats against world currencies. But before we spring to quick conclusions again, we must remember that China is so far ahead right now that India's fledgling momentum could easily get snuffed out.

At the end, it might come down to just one deciding factor: Can India fix its governance before China repairs its politics?