India's Disadvantage Relative to China
China's GDP per capita is more than twice as high than India's, whether measured at current exchange rates or estimated PPP. Yet China have continued to have faster growth, although the growth differential have recently narrowed. And this despite the fact that India's economy is much more overheated, as was noticed by The Economist recently. Money supply and credit growth is much faster than in China, as is consumer price inflation. And in sharp contrast to China and its large current account surplus, India has a significant current account deficit.
The problem for India is that it is the idiot savant of the world economy. While India's IT-sector is of first class quality, it actually employs a a mere 0.5% of India's workforce. India have little of the broad based labor intensive manufacturing that have helped lift hundreds of millions of Chinese out of poverty.
Meanwhile, for most castes in India, the Confucian cultural emphasis on education, thrift and entrepreneurship that underpin's China's boom, is completely alien, making it very unlikely that most Indians will be able to achieve anything like the high productivity of India's small elite of IT-professionals.
Even so, India is again likely to greatly outperform the West. Especially once China moves up the value chain , India should be able to overtake some of the low cost manufacturing jobs currently held by China. And India is expected to have a more favorable demographic situation than China a few decades from now, as China's "one child" policies result in an increasing burden of old age retirees. But despite this, China's prospects are much stronger because it has a culture more conducive for wealth creation than India.