ISAS Insights

New Delhi and Beijing announced their economic plans for the future within a few days of each other. On 26 February 2010, the Indian Finance Minister presented his government's budget for the fiscal year 2010-11. On 6 March 2010, the Chinese Prime Minister's address to the annual National People's Congress included the budget for the year 2010. This paper suggests that while there are many similarities between the approaches followed by the two governments as indicated in their respective statements, there are also several subtle differences. These include the explicit attention paid to taking care of the poor and reducing income disparities in the case of the Chinese approach. In the Indian approach, there is much greater focus on returning to higher rates of growth. In presenting the budget, the Indian leader had his eye on the foreign investor while in presenting his government's economic plan, the Chinese leader was more deliberately addressing his domestic audience. That said, both governments are setting the stages in their two countries for returning to the high growth trajectory. But adjustments need to be made for correcting some of the distortions that had crept in the previous growth spurts.