Thanks for providing the link to the article.
The material is useful for practitioners and student of Management alike, as external environment scanning is an important component of strategic management and PEST analysis is employed for it.
However I have always had a slightly different take on this. It is not proper to always compare India with China; not because it is a non-friendly neighbour or despite our penchant for chinese food, films or its population and burgeoning infrastructures. If we look at from the Political, Economic, Social and Technological angles, its as different from India as apples are from oranges. If one is looking for economic and business metaphors and similies, then certain South American countries offer a better comparison.
Another point of contention is the statement "The country’s state may be weak,....". It is not true at all, unlike the state of affairs in our smaller neighbouring countries. I would rather call it a Westerner's biased view and the consequential rub-off on "the Economists". A short-term event like the Commonwealth Games should not be a determinant to these issues. Moreover, though it suffered from the typical "Indian Wedding syndrome" which is marked by last-minute race; it did went off peacefully and magnanimously, despite the atmosphere created by certain sections of the media.
One should remember that the country's state owned units weathered the storm of recession successfully, as opposed to the American companies and financial institutions which buckled at the knees. It was an ordeal by fire, and the much maligned PSU's, showed their mettle to the extent that many financial institutions, real-estate companies, consumer durable companies began launching special campaigns and offers for its employees; a phenomenon unthinkable hitherto.
Agreed to the point that this is a westerner's view on India. For us it matters to realise the scope for foreign investment and attracting global talent base. Here's a presentation on China's HR challenges. No matter how different the economy works , you may find few concerns strangely similar !
In terms of comparing our economy, its dicey as we are the largest democracy. No matter how much our political system is flawed or written about it , we still stand a better chance with our education system compared to our counterparts and the 'Jugad' as defined by Peter Capali as our competitive advantage . According to him, our entrepreneurs think for a social cause while promoting a product or service. Finally, the search of holy grail as written by Late dr. C.K.Prahalad and Prof. Mashelkar shares that the concept of 'less is more' is the secret to the innovations we had in our country . Tata Nano stands as a direct example to it.
To make a country progressive, we may need a lot more. As agreed in the article, the virtues of a free society will win over other shortcomings.