India will make up for the 'lost decade' when it comes to keeping abreast with China in three years - or so predicts a leading American journal.

The Economist, in its latest cover story, predicts that India will outpace China by 2013. In "How India's growth will outpace China's", largely builds on the Indian government's growth projection of 8.5 percent for the current fiscal year - which the Asian Development Bank recently seconded. The ADB had earlier predicted a 8.2 percent growth, and revised it subsequently.

But these two figures are conservative compared to the International Monetary Fund (IMF) prediction which in July it had put India’s growth in 2010 at 9.5 percent.

So, how long will it really be before the the Indian tiger tames the Chinese dragon? The Economist says “It (India) has a long way to go before it is as rich as China - the Chinese economy is four times bigger- but its growth rate could overtake China’s by 2013, if not before.”

The report also states that India's demography will play out to the country's advantage, partcularly because has a huge youth (below 30 years of age) population.

"India is now blessed with a young and growing workforce. Its dependency ratio - the proportion of children and old people to working-age adults - is one of the best in the world and will remain so for a generation.”

The magazine also celebrates India’s brand of capitalism. “India’s individualistic brand of capitalism may also be more robust than China’s state-directed sort.” At the same, time the magazine also warned India’s against unemployable workforce and wobbling infrastructure.

“Indian capitalism is driven by millions of entrepreneurs furiously doing ahead with this task, and thriving small businesses with many world-class ones whose English-speaking bosses network confidently with the global elite,” the magazine added.

The magazine was also upbeat about the Indian democracy. “Ideas flow easily around India, since it lacks China’s culture of secrecy and censorship. That, plus China’s rampant piracy, is why knowledge-based industries such as software love India but shun the middle kingdom,” it says.
 
The Economist also noted “Given the choice between doing business in China or India, most foreign investors would probably pick China,” but the magazine further predicts “As the global economy becomes more knowledge-intensive, India's advantage will grow.”

Morgan Stanley too predicted in its report released last month India would match China’s GDP growth of around 8.5-9.5 per cent over the next two years. “Over the next 10 years, India’s growth is expected to outpace China’s and India’s per-capita income to reach China’s 2009 levels of $3,750 over the next 10-11 years,” the report added.

In the recent years, India has been a preferred location for the relative politcical stability it offers, says the magazine. "India can change governments without a revolution. In the long run, that may offer a better guarantee of the stability that businesses crave," it holds.