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This article provides information about the development experience of India with that of Brazil:
India and Brazil, both the nations are strikingly similar in many aspects. They had similar policies between 1950-1980 (Import Substitution, trade barriers, etc.), started their liberalisation process at approximately the same time (early 1990s) and both of them, for a very long time, have had a stable democratic form of government.
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So why has Brazil, historically, not been able to clock similar GDP growth rates as that of India? Well, the political policies adopted in the 90s were similar yet different in the ways the two countries went about implementing the guidelines.
We explain this in the First part. We also explain some of the major steps taken by the Brazilian government during its democratic regime to solve some of the most recurrent problems faced by the Brazilian economy what is the current state of economic well- being in the two countries? We take a look at some of the macro-economic factors for both the giant economies and understand their respective strengths and weaknesses which amongst the two nations is better placed in the future – India or Brazil?
Demography:
The quality of labour force in both these countries. What does the future hold in store for the two countries?
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According to the latest Mckinsey Quarterly report, Brazil and India have both managed to revive most of the Macroeconomic and Financial parameters in the wake of the Global Financial Turmoil. Gross domestic product (GDP) means the market value of all the services and goods that are manufactured within the territory of the nation during the specified period of time. Three Sectors constitute the GDP which are the Agricultural Sector, Industrial Sector and Services sector.
| Country | Agriculture | Industry | Services |
| India | 17.6% | 29% | 53.4% |
| Brazil | 6.7% | 28% | 63.3% |
Brazil grew rapidly to middle-income status with dramatically high rates of economic growth in the late 1960s and early 1970s. However, it has experienced extreme macroeconomic volatility and, over recent years, has recorded negligible rates of economic growth. India, on the other hand, has a relatively low level of per capita income and due to the high level of FDI’s and FII’s exiting the market, the Indian growth has reduced to around 6%.
Inequality Brazil has some of the highest levels of economic inequality in the world, a fact that is reflected in substantial disparities between regions in per capita income and economic growth. Brazil’s richest area, the Federal District in southeast Brazil, has a per capita income that is some seven times greater than that of the poorest state, Maranhao which is in the north east.
In Brazil, while it seems clear that the quality of transport and electricity provision is negatively affecting firm performance, firms do not cite infrastructure as an important obstacle to growth. Firms in India, on the other hand, are very concerned about the effect of deficient infrastructure on productivity. Power supply is identified as the most problematic element, with nearly a third of businesses rating it as a major or severe bottleneck.