Not if we see another bout of UPA where the inflation gallops to two digits with highest borrowing cost for legitimate firms with literally free monies for the crony firms .Suraj wrote:The middle income trap is not an end result. It's an obstacle, something that can and should be tackled with policy options. My general belief is that the middle income trap is a result of a country 'running out of tricks' . This is particularly the case when a country depends on doing one trick very well to get to that point. But then the law of diminishing returns sets in, and they lose their competitive advantage to someone else, and lack the financial, technological or industrial resources to continue to move forward. The solution to avoiding that trap is to continuously maintain a broad based economy capable of producing or cheaply acquiring all primary resources, with a vast light/medium/heavy industry and a monster services/consumer economy upon that. We are rather well placed in that regard, except for lacking in secondary (industrial) capability. But we have time, resources and resolve to build it.
And whatever the govt manages to rake in as revenue is then spent on aNYAY transfers to supposedly the lowest 20 % but actually a big chunk of it skimmed from the top by their rural patronage networks and another big chunk diverted to ghost beneficiaries direct into congie coffers.
Then forget using the comparitive advantage of the young semi skilled pop of UP/Bihar/WB/Assam for labour intensive jobs - the political machinery will be bogged down further in congie style mai-baap politics addicting the vast eastern Indian population to govt handouts.
Which is precisely what the guy is saying that if the eastern India is not politically reformed to remove the obstacles which currently deter the firms from moving in there to use the cheap labour/land/input costs there India's growth story will come to a stand still.Chetak wrote:the beedis have preferential access to eu and ameriki markets which they exploit to the hilt. big industries don't have viability in many northern states because of corruption, extortion and many other law and order issues. In comparison, the south is relatively quieter/friendlier in terms of industrial climate, law and order and just maybe, just a little less corrupt.
All that media is doing this and that is not our concern - he did give pretty much an apolitical prognosis of what can happen it a rentseeking congress dispensation comes to power. Those who can see the business implication and see beyond the channel,the presttitute anchor & its anti modi stance - i.e the business men & investors will understand the message on whom they have to support for robust economic growth.
Brazil has been languishing at low growth rates 1-4% since the 90s & what ever growth spurts it sees is due to cyclic commodities boom/bust in global economy.pankajs wrote:What the heck is this guy talking about? If we will be Brazil then we will also be China on per capita. Besides, for us to hit the middle income trap, our per capita GDP in USD has to quadruple! That is a really long ... LONG way away ....
Economy slowing is one thing but talk of a middle income trap in the "next 5 years" is just bonkers.
China has clocked double digit growth rates since mid 90's and reached the percapita income levels of brazil with 1.4 billion pop. Brazil is in a middle income trap.
Getting Bengal & Orissa while retaining UP-Bihar under a BJP political dispensation will be a key
>get basic needs down (house.electricity,education,health)
>get basic infra
>basic law & order
>basic political dispensation responsive to the need (land procurement , clearances ,minimal rentseeking etc)