India is a lot worse that China is in terms of economic development and its growth trajectory. Those that say that both India and China are rising powers are wrong as India will be left behind far behind China.
You statement seems very generic. Also, the two economies are very different (capitalism in India and communism in China) so I am not really sure if there is a good way to compare the two. There may be some truth in what you say but then democracy isn't really very good if speedy implementation of policies is what you are looking for.
I have seen things change (for the better) in India significantly over the last 20 years or so.
I also hear stories from my father (he is ~70 years old now) of his youth. During his younger days (~1970) if someone wanted to buy a car, you might have to wait for 7-8 years after booking for to actually get the car. This led to an interesting economic situation. For e.g. my father bought a scooter for INR 3000/- (~ $65 today) and sold it for INR 6000/- (~ $130 today) after 6 years. This worked because during those days people found it better to pay for an older scooter than wait so long for a new one. Today, one can just walk into a showroom and walk out with a car or scooter or motorcycle.
There was no concept of a bank loan in those days. If someone wanted to buy a home or such, you would typically borrow money from friends or relatives. Today banks chase you for giving you loans.
Even during my lifetime, things have become significantly more convenient and opportunities have grown considerably.
While there is corruption, the number of areas controlled by the government has come down significantly. Also, there are acts like the Right to Information (http://en.wikipedia.org/wiki/Right_to_Information_Act) which are helping in curbing corruption. There are private players in a lot of industries which were traditionally controlled by the government (oil, steel, telecom etc.). With the license raj gone starting 1990 (http://en.wikipedia.org/wiki/License_raj) thing are definitely looking good.
I have seen significant improvements in the way SEBI (http://en.wikipedia.org/wiki/Sebi) handles the equity market. The room for frauds has gone down in this areas even in the last ten years or so since I have been following the SENSEX (http://en.wikipedia.org/wiki/Sensex). SENSEX has moved from ~1900 in 1991 to ~19000 today. 1990 is when the license raj ended.
While there are a lot of things that can be improved and there is still a long way to go, I think there are a quite a few things that are going right for India at the moment. I do expect the growth to plateau in 15-20 years or so but at the moment things seem to be going well.
I haven't really been following the Chinese economy apart from the high level growth number that I tend to hear in news from time to time so I can't really comment on that.
For example, Today, 50% of India has access to electricity for 10 hours a day. This is a fantastic achievement and is in right direction, If you compare with No electricity to this 50% of india two decades ago. It is not that fantastic when you compare with rest of the world where people cannot imagine living without electricity for an hour.
As you mentioned The direction, Providing access to electricity is right, The pace at which is happening makes me less hopeful.
In order for things to improve, Citizens of India have to acknowledge and accept that there's a problem, That's just first step towards solving the problem.
1. Both China and India are placed equal in Corruption Perceptions Index. [1] China needs to worry more because of lack of free-media to expose corruption.
2. How is 8-9% GDP growth of India lot worse than 10-11% GDP growth of China? Keep in mind that India started 13 years later than China in liberalising its economy and lost the first start advantage to China. But that doesn't mean China is inherently superior.
3. India will be left behind only if China continues to grow at double digits forever. Most economists around the world have increasingly become skeptical about China's future growth trajectory.
[1] http://en.wikipedia.org/wiki/File:World_Map_Index_of_percept...
Economic liberalisation began in China in ~1978 and Indian reform in ~1991. So, the Chinese are more than 10 years ahead.
So, while it is worse its not a lot worse. It is made great strides in IT, steel, textiles and other fields.
I expect in 10 to 20 years India to be a serious competitive threat to China, especially considering demographic trends.