Not so long ago, it was common wisdom that China and India were getting dragged down by their huge populations. But numbers are proving to be their biggest economic asset, providing huge domestic markets and an inexhaustible labour force for exportable products.

This prompted the head of Intel Corp. to say that the two Asian giants are out to eat America's lunch. He could have added that they may have similar intentions toward Canada, Europe and others.

Craig Barrett, CEO of the world's largest computer chip maker, sees the tectonic economic shifts under way and sighs: "I worry for the U.S. and I worry for my grandchildren."

He is dazzled not only by the energy and enterprise of the Chinese and the Indians but the quality of their work, especially India's software engineers. Which is why India is Intel's third largest operation, after America and Israel.

China is, of course, way ahead in the economic race. But India is brimming with self-confidence on its unique set of assets. Besides democracy, it boasts:

• The largest skilled workforce, of 472 million, most of them literate and English-speaking.

• The second-largest pool of scientists.

• A hi-tech medical sector, already attracting more than 100,000 foreign patients a year - Arabs avoiding America, and Europeans avoiding long waiting lists at home.

• A solid manufacturing base, turning out, among other things, the world's largest output of motorbikes and three-wheelers.

• The largest railway network, including a just-opened, indigenous $2 billion subway in New Delhi, the capital.

• An information technology sector, which has grown 40 times in a dozen years to $20 billion a year and is poised to cut into the coming boom in software services, from the $650 billion worldwide today to $3 trillion in five years.

More than these economic indicators, though, something more profound is underway, five decades after independence.

India was stripped clean under British rule, its vast riches plundered and its manufacturing capacity squashed.

Independent India's economy, therefore, had to be built almost entirely by the state. Socialist the model was, but it did lay down a rudimentary national infrastructure.

What's happening now is that the economy is freeing itself of government.

"Permit Raj," wherein most economic sectors depended on the say-so of the ruling party, is dying. Changes in government no longer matter.

In last year's federal election, the left-leaning Congress defeated the so-called free enterprise Bharatitya Janata Party. In this southern state of Andhra Pradesh, the party that pioneered hi-tech got trounced. 

Neither change made a difference to business. India is experiencing its fastest economic growth in 15 years. 

When Jet Airways, the nation's first private airline, was listed on the Mumbai Stock Exchange recently, $350 million of stock was snapped up within minutes. 

Union strikes, which plague Europe, are becoming a thing of the past here as opportunities proliferate.

Meritocracy is taking hold. Gone are the days when the only route to a job was a recommendation from a political bigwig.

Also gone are the Soviet-era suspicions of Westerners and Western governments. It helps that just about everyone has a cousin in North America. Media are thriving.

For example, this city of 6 million, the nation's fifth largest, has 14 daily newspapers - four in English, five in Telugu, two in Hindi and three in Urdu, for a total daily circulation of 3.5 million copies.

There are still problems galore.

The federal budget, tabled last month, allocated huge sums to electrify the 125,000 villages that still aren't, bring drinking water to the 74,000 villages that don't have it, and provide land phone lines to 66,822 villages that have no connection.

But the economic revolution is well underway, without the tyranny that still marks China.

Haroon Siddiqui is the Toronto Star's editorial page editor emeritus. [email protected]