Comparative study of components of external borrowing between India and China

In early stages of economic development almost all nations obtained foreign finance to supplement their limited domestic savings. Though the classical economists were against public debt, Keynes supported the borrowing for development. Of late the two emerging economies are India and China. China leads with 1334.7 million and India following them with 1166 million. In spite of higher population, China's Per Capita GDP is far better when compared to India. In terms of US dollars India's Per capita GDP was 1100 $ whereas China has 3734 $ which is almost double the times higher than India. In 2009, China's international reserve was 24, 25,856 millions U.S. $, whereas, for India, it was only 2, 74,668 million U.S. $. China had favourable trade balance of 196 billion U.S. $ but India had adverse trade balance of -99.76 billion. This paper has simply attempt to compare the debt of both countries. In this paper the absolute values of debt outstanding, long term debt, short term debt and I.M.F. debt of China and India are compared using graphical representation for both. The graphs show that both the countries debt is going on increasing. But China's debt is always higher than India. Of late India's short term debt is growing at a faster rate. Whatever it is China borrows higher than India. Emulating China in short term borrowing is highly risky and dangerous for India, as the controlled system of China cannot be emulated in India.