His comments come after the Organisation for Economic Co-operation and Development (OECD) said Indian firms received significantly lower government support than their Chinese counterparts during 2005-2024.
The official said Indian firms borrow on market terms unlike China where rates sit below benchmark.
“Between 2005 and 2024, Chinese firms received on average three to eight times more government support than firms based in the OECD, a conservative estimate. These subsidies were also considerably higher than the support received by firms based in non-OECD economies such as Brazil, India, and Indonesia,” the OECD said in a report Sunday.
OECD MAGIC Database of Industrial Subsidies measures what firms actually receive (not what governments disclose), covering 525 of the world’s largest manufacturers across 15 key sectors over 2005-24, through three instruments: grants, income-tax concessions, and below-market borrowings (cheap state-bank loans).
“In OECD loan-rate analysis, Indian firms cluster at or above their base borrowing rate-i.e. no below-market-borrowing distortion, unlike China where rates sit below benchmark,” the official said.
The most subsidised sectors are solar PV, semicon, steel and shipbuilding and several of them have grown concentrated in China.