Democracies are built to slow you down. This is useful when those in power want to do despotic things. But it hinders when politicians have the right ideas for the betterment of their people. Autocracies are built for speed. They work brilliantly when those in power are making the right choices (Singapore, the Asian tigers, China after the 1980s). They end up in disaster when the direction taken is wrong (Zimbabwe, Russia, Uganda).Global investment manager Ruchir Sharma , who has studied both types of states, says that over the long term the two deliver similar levels of economic performance. The difference is that outcomes in the case of democracies are more stable and sustained, while in the case of autocracies they are more volatile.As India celebrates its 73rd Independence Day, we can speculate on whether the same tendency to revert to the mean will help tortoise-like democracies like ours to catch up with the autocratic hares. China and India, despite taking different political paths, did not fare too differently till the early 1980s. Democratic India courted slow growth under Nehruvian socialism. Despotic China under Mao, and even a bit later, sped through one blunder after another (Cultural Revolution, Great Leap Forward, one-child policy, etc). By 1980, the tortoise and the hare were about level in terms of GDP size.Cut to today. The Chinese economy, at around $13 trillion, is the world’s second largest, and five times India’s $2.6 trillion. Per capita GDP is more than four times higher. However, this underestimates India’s achievements due to exchange rates. In terms of purchasing power parities (PPP), our current GDP would be the equivalent of $10.5 trillion versus China’s $25.3 trillion, according to World Bank estimates. This makes China roughly two-and-a-half times India’s size. This is the real gap in how we performed economically vis-a-vis China post-1980.Why did China take off like a jack-rabbit after Mao’s death (in 1976) while India could never sustain high growth rates even after the 1991 reforms? The difference was the one big thing despotic China got right before 1980 – much better literacy and health. In the early 1980s, China was streets ahead of India with literacy levels of over 60% while India’s was under 40%. It was also better in terms of health, mortality rates and gender equality. Even today this gap persists, with China ranked 86th in the UNDP’s Human Development Report, against India’s 131st. If one were to take a bet on where India will be 10 years from now, despite the closing literacy gap with China and fresh efforts by the Modi government to improve health indicators through Ayushman Bharat and Swachh Bharat, one has to bet on China rather than India. But after that, one should bet on India.A recent success for India has been poverty reduction, and steady improvements in the gross enrolment ratio (GER), which measures the number of students studying at a specific level of higher education against the total number of eligible students at the same level. The GER has moved up from 19.4 in 2010-11 to 25.2 in 2016-17, and could be rising further. In poverty, the World Data Lab of Brookings Institution suggests that the number of poor in India will fall to 40 million this year, giving us a poverty ratio of just 3%. NSSO consumption data to be released later this year will tell us if this is really true.China used autocratic methods to ride roughshod over labour and land ownership rights, and indulged in financial repression in order to channel domestic savings and foreign investments into infrastructure and export manufacture. These excesses, and also the flawed one-child norm of the late 1970s, will come back to bite it in the form of social unrest and a shrinking working age population in the coming years.In India, even as we struggle to reform land and labour laws, growth and poverty reduction have acted as natural decelerators of population growth. And as the country grows both its working age and senior citizen populations, savings and investment rates will rise. A world awash with low-cost capital will come to India, if we get our policies right.So, which policies should we get right?First, devolve more power to states and further to cities. The last is particularly important, for powerful urban leadership and concentrated urbanisation is the key to growth and jobs. In 2018 India was about 33% urban, China 58%. The critical difference is the quality of China’s urbanisation: it is concentrated around the eastern seaboard, while India’s is distributed over large expanses around metros. Improving social and physical infrastructure is key to making cities more concentrated around their core. This will raise wages and absorb rural labour surpluses quicker than almost any other reform.Next, get more investment into primary and secondary education, and also low-cost healthcare facilities. This was something China got right even under Mao, thus enabling it to gain enormously when policies changed for the better under Deng. And third, correct the taxation bias that favours capital investment over labour force expansion. In India, taxes on wage incomes are much higher than taxes on capital-based earnings, and this is only now being corrected.India may not catch up with Chinese GDP levels anytime soon, but incremental corrections in a democracy will ultimately enable us to do so – and without sharp social and political setbacks. Prime Minister Narendra Modi ’s clarion call for reaching a $5 trillion economy by 2024 may or may not be realised, but a $10 trillion economy in the early 2030s is a near certainty.