Is it time to be less optimistic?

"Democracies are built to slow you down," wrote R Jagannathan, comparing India with China. "Autocracies are built for speed." Till the 1980s the economies of China and India were about equal but today, at $13 trillion, China's GDP is 5 times that of India's at $2.6 trillion. Why? Because, "China used autocratic methods to ride roughshod over labor and land ownership rights, and indulged in financial repression in order to channel domestic savings and foreign investment into infrastructure and export manufacture." China suffered the 'Great Leap Forward' under Mao Zedong, while India suffered the humiliation of begging for food from the US under the PL 480 program to stave off a famine in the 1960s. While Mao Zedong unleashed the Cultural Revolution to regain total power after the failure of the Great Leap Forward, India suffered a period of Emergency when the media was silenced and opponents imprisoned. If China had "financial repression", Indian banks were nationalised in 1969, which was an "economic disaster but a smashing political success", wrote SA Aiyer. Prime Minister Modi may bang on about a "Congress-mukt Bharat", meaning an India free of the Congress, but he has made no attempt to privatize state-controlled banks because they allow him to use depositors' money for political gifts. "Global investment manager Ruchir Sharma, who has studied both types of states, says that over the long term the two deliver similar levels of economic performance," wrote Jagannathan. "Early on, when these countries were about the same per capita income level as India is today -- the East Asian economies were run by autocrats who favored a powerful but small government focused almost exclusively on export manufacturers, which meant investing in roads and factories, not welfare for the poor and weak," wrote Ruchir Sharma. "Between 1993 and 2005, Chinese state enterprises laid off 73 million people." "Contrast those attitudes to India, where government is suspicious of the private sector, and elections are fought on promises of generous welfare benefits for the poor." Perhaps, the main difference is that autocrats need to keep improving people's lives or they will face rebellion, while in corrupt democracies politicians blithely use taxpayer money to win elections by buying votes of poor people by distributing handouts. Only 68.5 million filed tax returns in 2017-18 out of a population of 1.3 billion, of which 20.2 million earned less than taxable income. The bulk of income tax collection comes from the top 5% of taxpayers, wrote N Kwatra. Modi won re-election because of his social schemes, wrote Prof Ila Patnaik. This means there is an unspoken agreement between politicians and the poor which takes away any accountability from politicians. Forget becoming a rich country, India is probably stuck in a low middle-income trap, according to a member of the economic panel advising Modi. Indians are very optimistic by nature. Time to be realistic.