India vs. Pakistan - Why the economy of India is so much better than that of Pakistan

At the Time of Independence - India Vs. Pakistan

When Pakistan and India gained independence from Britain on August 15, 1947, they both inherited the same level of economic underinvestment as the British Empire left. 

Everyone has been interested in hearing about the news from India and Pakistan, including the India Pakistan border and the India Pakistan match. For both countries, it was imperative to pursue faster growth in order to support the development of the healthcare, educational, and other sectors of the national economy. For the first forty years, Pakistan demonstrated a faster growth rate than India, which lagged behind Pakistan.

1990 - Worst Decade for Pakistan Economy

When something or a change occurred in 1990, the roles were reversed. India is now the third-largest economy in the world in terms of purchasing power, leapfrogging Pakistan. When comparing the political situations and the economies of the two nations, Pakistan suffered from problems with military intrusion while India benefited from a democracy that promoted economic growth.

Pakistan lost its economic engine in 1971, and Bangladesh gained independence at the same time that Pakistan received millions of dollars in military aid from the United States. Since then, Pakistan's economy has grown by 6% from 1961 to 1980, compared to India's 4% growth.

India Got GDP Growth in 1990s

Once more, the trend was reversed in 1991, when India's growth rate rose to 6% for the following 30 years while Pakistan's stood at 4%. Pakistan's reliance on outside forces for funding and military intervention in the nation was the cause of this. Martial Law had the biggest effect on the economy of the nation, and Pakistan still depends on organisations like the International Monetary Fund for loans as well as other governments like Saudi Arabia and China for infrastructure development.

 

These actions are being taken for a reason, Pakistan has failed to pursue the collection and expansion of its tax base. Also, there was an India-Pakistan border issue on the Line of Control. As a result, the nation became dependent on aid from other nations or institutions as a result of the corruption that existed there. It had a significant impact on Pakistan, making it impossible for the nation to pursue a sustainable growth path and attract foreign direct investment.

Growth - India vs. Pakistan

When Pakistan was being monitored by the FATF and India was expanding its use of information technology while importing products like software and vaccines into other nations, the situation grew worse. Additionally, India opted for trade liberalization in 1991 in order to have the lowest tariffs in the market, simplify operations for domestic businesses, and pave the way for reforms and foreign direct investment. In 2021, Pakistan's GDP per capita was 50% lower than India's, which had a per capita GDP of $2277.

There have been numerous governments in Pakistan since the years 1988 through 1998 alone. The military and civilian governments alternated, which has had a greater effect on discouraging foreign investment in the nation. India, on the other hand, was successfully governing its stable democracy. It kept the leaders in check by making them aware of the fact that there was less reliance on foreign institutions or governments and more reliance on efforts to promote industrialization in the nation.

Around 270 million people were lifted out of poverty by India. It demonstrates that politics has a significant impact on Pakistan. Investors are reluctant to invest in Pakistan because of the nation's unaffected economic conditions. On the other hand, India is offering the world better solutions while maintaining a stable democratic political system.