Running head: CASE STUDY ON INDIA 1

Case study on India

Name

Institution
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Case study on India

Evolution of GDP composition: India versus Brazil

Sustainable growth of an economy depends on the ability to fulfill the needs of the present

population without compromising the needs of future generations. India is flourishing as an

emerging market in the world. The purchasing power of India has been increasing in a very

steady way. The resources generated by the recent growth have been invested in social welfare,

healthcare, and education. BRIC consists of Brazil, Russia, India, and China considered as the

biggest emerging market of the world.

India and Brazil both have a multi-trillion-dollar economy. It is very apparent that though Brazil

and India have an almost similar sized economy the economic fortunes of these two countries

appear to be on the divergent path. The aggregate gross domestic product (GDP) of India is

larger than Brazil’s. But Brazil is far richer than India on the estimated GDP per Capita. Where

Brazil had $12,200 India had $1542 GDP per Capita in 2015. The greater growth of India’s

growth is being driven by extensive foreign trade. In 2013 the contribution of foreign trade was

58% of total GDP. Brazil had only 25% in 2015. International investors are using the cheap labor

and producing export-oriented products, on the other hand, Brazil depends on Coco, Rubber as

their main product for export (Mishra, Ram & Pan, 2014). Apart from the foreign trade other

composition of both countries are almost similar. Both have highest private investment sector

which comprises almost 60% in Brazil and 70%-75% in India.

India has maintained its productivity. It has moved from the rigid caste system to incorporate

more efficient growth system. Average GDP growth in India is 6.7%. The country depends on its

cheap labor high consumer market and garment to expedite the economic growth (Rao, 2015).
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Evolution in corruption Perception Index

Since 2000s the credibility of Indian Government has been damaged greatly. Economic

efficiency has also been damaged by pervasive corruption. For the regulatory uncertainty and

corruption in doing business investors moved their capital elsewhere. FDI inflows remain low in

India at $24.6 billion comparing $106 billion in China and $41.2 in Russia. India lost estimated

40 billion tax revenue due to corruption in telecom licensing in 2008 (Mishra et al., 2014).

The scenario has been changing since 2011. Indian government took radical actions, arrested

many government officials for alleged corruption case. A very controversial decision to ban 500

and 1000 rupee note was taken by New Modi government to fight corruption. Its effect has been

found in CPI. India now stands in 94th position in 2010 it was in 137th position. But its effect on

economic growth is apparent. India has lost almost .5% GDP growth (Rao, 2015). Singapore is

very successful in eradicating corruption. The main advantage of Singapore is that it is a small

city country and it has inherited the British governing policy and procedures. It has zero

tolerance towards corruption.

Like India Brazil is also fighting against corruption though Brazil Stands in a better position in

CPI index (42) many corruption scandals questioned the government policy against corruption.

Public protested against corruption in street and emboldened media to fight against it. As a result,

the authority has made 200 arrest and lower courts convicted 80 people including the conviction

of the CEO of the largest Latin American largest construction group. The Supreme Court fined

3.5 billion for bribing government officials.

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References

Mishra, Ram Kumar, & Pan Suk Kim. (2014). Major Challenges of Public Governance and
Public Affairs in India. The Korean Governance Review, 21(1), 97-122.
http://dx.doi.org/10.17089/kgr.2014.21.1.005
Rao, M. (2015). Political Economy of Government Finance in India. India Review, 14(1), 58-72.
http://dx.doi.org/10.1080/14736489.2015.1002300