Event ReportsPublished on Oct 12, 2013
India and China have many similarities and the inequalities in incomes are clearly visible in China as in India, according to Mr. M.R. Sivaraman, former Revenue Secretary of the Government of India.
Inequalities equally visible in China as in India
There are many similarities between India and China and the inequalities in incomes are clearly visible in China as in India, according to Mr. M.R. Sivaraman, former Revenue Secretary of the Government of India.

Giving a talk on 'Impressions from China', based on his experiences and observations during his recent visit to China, at the Chennai Chapter of Observer Research Foundation on Saturday, 12 October, Mr Sivaraman drew parallels between India and China on various aspects.

Talking about the income inequalities, Mr. Sivaraman said that the middle class in China is very slim and so was the higher classes whereas people of poorer means formed the majority of Chinese population. More than driving a car obtaining a licensing plate is extremely tedious in China, he noted. People have to bid for their license plates and sometimes end up paying more than what they paid for their car. Mr Sivaraman said the cars on the street were mainly owned by the rich population of China.

Mr Sivaraman explained the process of ordinary citizens enrolling themselves in the Communist Party, based on his interaction with a party member who had joined the party recently. According to this source, outsiders would find it extremely difficult in getting into the party. They would be monitored for nearly three years before being given a provisional membership for a few years. Only after this would a person be made a member of the party. He said only people close to the higher rung authority can make it into the party with ease.

Mr. Sivaraman said that civic obedience in China is indifferent from that of India. He said that people did not even maintain hygiene and spit in places of tourist attraction such as the Forbidden City. "It is a very rare sight to find a uniformed official in the streets", said Mr Sivaraman. He added that despite having the largest standing army, not a single military personnel was to be found in the cities.

Based on his experiences as the revenue secretary, Mr Sivaraman detailed on specific aspects such as taxation policies, growth in GDP and the contribution of various sectors for China's growth. He listed the various taxation policies of the world's most populous nation. He said that there were nearly 20 tax laws which drained nearly 60% of the capital gains. Chinese also have a value added tax of 17% and 13%. While explaining the value added taxes, Sivaraman noted the various rates prevalent in other countries, including India and many others in Europe. He said 16% was the optimum range of taxing.

He also detailed upon the recent report of IMF on the world economic outlook in which China and India occupied significant positions. According to the report, China is said to grow at 7.5% per annum while India's growth has been pegged at 3.5%. Alongside, explaining the various sectors and their respective contribution to GDP, Mr Sivaraman said that a Free Trade Zone was being set up near Shanghai and is about to be operational. The rate of inflation in China has eased to 2% as compared to 6% last year, Mr Sivaraman noted. He said in India, despite several stringent measures by the Reserve Bank of India to restrict liquidity, the inflation rates have not come down. Many economic theorists are yet to give convincing models for such a scenario, he pointed out.

He said though there is a general consensus that a democratic system would increase growth, with China's model many might even consider a semi-autocratic system to produce more growth.

Talking about Beijing, Mr Sivaraman said there are nearly 90 shopping malls in the city and the biggest mall in the world is being built there by a Hong Kong firm. He said the oldest mall in the city dated back to 1910. He was overwhelmed by the pace of Chinese construction though skeptical about the sustainability of their projects. He asserted that China must stop investing on infrastructure and real estate since there were towns which are barely inhabited due to the exorbitant pricing of houses. People who bought the house only held a lease of 70 years.

About the power generation capacity of China, Mr Sivaraman said that just one plant could produce 22,500 MW of power, which was more than twice of the total power requirement for the whole of Tamil Nadu. But he also noted that such projects also had their own negative impacts. Nearly 140 towns and 13 cities have been submerged as part of the projects. At nearly 1000 places, soil erosion has taken place due to the rise and fall in the water levels of reservoirs.

During the interactive session, there were many queries and inputs provided by the participants. It was also agreed during the interaction that Chinese villages did not look "village-like" any more but seemed "urban-like".

Mr. Sivaraman said the Chinese government is maintaining a Siva temple for the people. However, there is a certain amount of discrimination in that no Chinese would even enter a restaurant run by Muslims. He said Chinese in general have a very good impression about India and many of them wish to visit our country.

(This report is prepared by Ramalingam. Va, II BA student,Journalism & Mass Communication, S R M University, Chennai)

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