Hong Kong spreads over 1,104.4 sq km and is home to 7.097 million people. Its GDP was $224.1 billion in 2010 at a GDP real growth rate of 6.8%.
Hong Kong is one of the leading capitalist economies of the world. It has been ranked as the freest economy for 17 consecutive years in the Wall Street Journal and Heritage Foundation’s Index of Economic Freedom. Hong Kong has proved that resources are used most efficiently if market forces decide its allocation. Hong Kong is one of the richest economies in the world.
India represents 17.31% of the world’s population spread over an area of 3,287,263 sq km. The latest population census conducted in 2011 states that the population of India is 1.21 billion. India has a population growth rate of 1.58%. The Indian economy grew 7.7% in Q211. This is India’s weakest growth rate in six quarters. Despite great economic growth, India faces a lot of economic and social inequality, a high rate of unemployment and poor standard of living.
Have more regulations and restrictions and you will have greater obstacles in business and the economy will not prosper. This will lead to poverty, corruption and reduce the quality of life in such countries.
Government control should be limited to maintaining law and order, enforcing the rights of individuals and protecting the territorial integrity of the country. This means that the economy of a country should be made free for rapid development to take place. We have seen the benefits of partial liberalisation in the 1990’s. India boomed. Imagine what would happen if carry forward the process of liberalisation further – eliminate control on foreign investments (retail still remains banned), sell all government owned companies, modify labour laws to where contract between worker and their employers are honoured, lower investments to below 15% – do all this and see India grow at 15%.
If we have to ever match Hong Kong or other developed regions, we need to grow much faster otherwise the gap between us and them will remain. If Hong Kong grows when it is already so rich at 6.8%, India’s aim should be double of that.