India's going to beat China in one of the most important metrics in the world

India’s finance minister, Arun Jaitley, says his country is going to surpass China’s economic growth.

In an interview with the Financial Times, he said the world’s largest democracy (and currently the strongest BRIC) has much to gain from the economic reforms his government will undertake in the next few years.

“I think we can do even better,” than China, Jaitley told the FT, but added that that milestone wouldn’t give him much satisfaction, because China’s economy is still bigger than India’s.

Take a look:

China’s GDP was $US9.24 trillion in 2013, while India’s was $US1.87 trillion.

In his 2015 budget, Jaitley forecast that India’s economy would grow at 8%-8.5% this fiscal year, versus 5.4% the prior year. (China’s growth was 7.4% in 2014.)

That sounds really nice, but there is a big “but” here:

India’s statistics bureau just completely changed the way it calculates GDP, confusing everybody, including central bank governor Raghuram Rajan, who said at the time that he didn’t even understand the new calculations.

In light of that, Capital Economics’ Shilan Shah wrote in a recent note that, for now, it’s more useful to focus on other indicators of economic activity rather than on GDP growth — indicators like weak inflation and industrial production numbers.

CPI inflation growth came in at 5.17 per cent year on year last month versus expectations of 5.41 per cent, while WPI inflation contracted 2.33 per cent, more than the expected 2.1 per cent.

Lombard Street Research’s Shweta Singh says India “needs to increase its faltering investment in productive areas” in order to reach higher growth rates.

“There is a still a long way to go,” says Shah, before India matches China’s growth rateĀ  — or its importance to the global economy.

So hang in there, Jaitley.

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