Indian Economy News & Discussion - Nov 27 2017

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Singha » 11 Jul 2018 12:02

NDTV

It is a distinction that no country wants: the place with the most people living in extreme poverty.
For decades, India remained stubbornly in the top spot, a reflection of its huge population and its enduring struggle against poverty.

Now new estimates indicate that Nigeria has knocked India out of that position, part of a profound shift taking place in the geography of the world's poorest people.

According to a recent report from the Brookings Institution, Nigeria overtook India in May to become the country with the world's highest number of people living in extreme poverty, which is defined as living on less than $1.90 a day. The threshold captures those who struggle to obtain even basic necessities such as food, shelter and clothing, and takes into account differences in purchasing power between countries.

The Brookings report was based on estimates generated by the World Poverty Clock, a model created to track progress against poverty in real time. As of Monday, its figures showed that India had 70.6 million people living in extreme poverty, while Nigeria had 87 million.

What's more, the gap is widening: The number of people living in extreme poverty in India is falling while the opposite is true in Nigeria, where the population is growing faster than its economy. Extreme poverty rises in Nigeria by six people each minute, according to calculations by the World Poverty Clock. Meanwhile, the number of extreme poor in India drops by 44 people a minute.

"It's a good news story for India, coupled with some caveats, and it's a real wake-up call for the African continent," said Homi Kharas, director of the global economy and development program at the Brookings Institution.

Extreme poverty is increasingly an African phenomenon, the Brookings report noted. Africans make up about two-thirds of the world's extreme poor, it said. By 2030, that figure could rise to nine-tenths if current trends continue.

Africa's central place in the battle against poverty comes amid dramatic progress worldwide. Since 1990, the number of people living in extreme poverty has fallen more than 60 percent, according to the World Bank. Much of the reduction has come in Asia, first in places such as China, Indonesia and Vietnam, and more recently in India, which appears to have made striking achievements in recent years.

In a post on Monday, World Poverty Clock researchers raised the tantalizing prospect that by 2021, fewer than 3 percent of India's population will live in extreme poverty, a benchmark viewed by some development economists as "a watershed moment."

For many in India, such talk is sure to provoke sharp debate. Tens of millions of people remain destitute and thousands of farmers commit suicide each year. Nearly 40 percent of Indian children under 5 are short for their age, a sign of chronic undernutrition.

"The claims that India is on the verge of winning the battle against extreme poverty sit uneasily with the current concerns about job creation or rural distress," said an editorial last week in Mint, a financial newspaper in India.

Part of the disconnect may be the result of how poverty is defined. The extreme poverty threshold is an absolute measure used for international comparison. Last year, however, the World Bank added another benchmark that aims to capture a sense of relative poverty. For "lower middle income" countries like India, it set the line at people who live on $3.20 day. By that measure, a third of Indians are poor, economist Surjit Bhalla estimated in a recent article.

More clarity could be only months away. In June, the Indian government completed a national survey which is conducted once every five years and provides the best available data on poverty. In the past, the results have been released anywhere from several months to a year after finishing the survey. Bhalla, an economist who also serves as a part-time adviser to the Indian government, believes that the country's own data could show it made even more progress reducing poverty than the estimates produced by Brookings and the World Poverty Clock.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Suraj » 11 Jul 2018 13:06

The article is wrong in this claim:
For decades, India remained stubbornly in the top spot, a reflection of its huge population and its enduring struggle against poverty.

India had the most number of extremely poor, between 1999 and 2016. Before 1999, China held that position pretty much since the 1940s. They dramatically improved by turn of century under Deng Xiaoping's reforms. We overtook them because the rate at which our extreme poverty rate fell was far more gradual than theirs.

However, it's now our turn to see extreme poverty drop dramatically, and we have handed this 'crown' over to Nigeria, and the silver medal as well to Congo. From the Brookings blog:
Image

Previously posted with more analysis in this post two weeks ago.

Between 1980 and 2000, our extreme poor population was more or less static at 450 million. As recently as 2012, we had ~270 million people who were extremely poor. By 2020, that'll be down to ~30 million. By 2024-25, extreme poverty will basically have been eradicated. Another post on this - the analogy is very similar to polio eradication. It takes a long time to start making initial gains, but once there's widespread developmental traction, the gains are dramatic, and finally, the drop tapers as we reach a few stubborn corners that take a little longer.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Supratik » 11 Jul 2018 19:20

India ranks 57 in Global Innovation Index.

https://economictimes.indiatimes.com/ne ... 935501.cms

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Supratik » 11 Jul 2018 19:39

Problem now seems to be components manufacturing - electronics - see data.

https://www.financialexpress.com/indust ... a/1238006/

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby rsingh » 11 Jul 2018 21:46


How come we are stuck at 2T for last 10 years with 7% growth ?

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby nash » 11 Jul 2018 21:53

rsingh wrote:

How come we are stuck at 2T for last 10 years with 7% growth ?


exchange rate, i believe

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Supratik » 11 Jul 2018 21:57

Due to growth slowdown under UPA2 and delayed recovery under NDA2 and severe depreciation of rupee from around 50 to over 60 under UPA2. But we have already crossed UK in Q1, FY18-19 according to Piyush Goyal tweet.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby hanumadu » 11 Jul 2018 22:02

At one time our exchange rate was 38 rupees to a dollar. At that exchange rate we could have been 4.65 trillion dollar economy.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby rsingh » 11 Jul 2018 22:14

So this is due to exchange rate. What if Trump does the things and $ goes southwards? We will be 4T economy within days?

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Suraj » 11 Jul 2018 22:15

Yes. That's why I prefer to look at PPP GDP instead of nominal GDP data. On any given day we could be 5th, 6th or 7th largest economy depending on where the Rupee, Euro or Pound is.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby VenkataS » 11 Jul 2018 23:44

Yes if we continue to grow between 7-10% per year over the next 10 years, keep our inflation down and keep our merchandise trade deficit within control then we have a decent chance of being a ~$10 Trillion economy in nominal terms by 2028. Our services trade surplus coupled with remittances and FDI that is sure to flow in, coupled with high growth will ensure that the Rupee will appreciate a decent amount over the 10 year period. This would give a further boost to the nominal GDP figure.

These should be the primary objectives over the next 10 years (My wish list):
1. GDP growth at between 7-10% (preferably mostly at the higher end).
2. Inflation consistently between 3-5% (hopefully mostly at the lower end).
3. 10% growth in merchandise exports every year. Probably heavy focus on export oriented SEZs with more relaxed labor laws.
4. Making sure that Indian industry grows at >10% every year ensuring sufficient blue collar job growth.
5. Making sure services sector continues to grow at the same pace and improving farm productivity levels across the nation (replicating the success in Gujarat)
If we can achieve all of the above then it is conceivable to think the Rupee will appreciate >2% every year against the dollar.

This coupled with the following will improve our HDI substantially:
1. Increasing the amount of years each student remains in school. Focus on elimination of dropouts until class 12 (or until an ITI degree is earned).
2. Enabling building of quality ITIs across the country. Both quantity and quality is needed here.
3. Focus on literacy in states which are lagging behind. An idea here is to institute a national level adult literacy scheme (for adult illiterates) over a 5 year period with initial focus on literacy in the local language and later on imparting vocational skills after a certain proficiency in literacy is achieved. With each growth step the government could incentivize the individual with a small cash/loan grant.
4. Improving IMR and MMR and addressing child malnutrition. Focus on achieving >95% institutional deliveries and ensuring 100% vaccinations for all children.
5. Improving access to healthcare across the nation.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby yensoy » 12 Jul 2018 06:17

^^^^ Increase in merchandise exports together with decrease in merchandise imports! Across the board decrease - both low value imports from China and overpriced service/know-how type of imports from the West which should start getting executed in-country.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby jpremnath » 12 Jul 2018 09:15

rsingh wrote:

How come we are stuck at 2T for last 10 years with 7% growth ?

We crossed 2trillion only in 2015...And 1 trillion in 2007...And probably cross 3t in 2020 or 21

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby tushar_m » 12 Jul 2018 10:45

India will overtake UK this year as the world's fifth biggest economy

According to the World Bank's latest estimates, the Indian economy was $15 billion bigger than the French economy in 2017. India is now behind United States of America (USA), China, Japan, Germany and United Kingdom (UK) in terms of economy size. Both the US and China are multi-trillion dollar economies whereas India is now a $2.6 trillion economy. The UK's economy as of date is just about $25 billion bigger than India's. In the post-financial crisis years from 2010 to 2017, UK's economy has grown by a little under 2 per cent on average. India's economy has grown by 7.3 per cent on an average during the same period. If both economies continue growing at the same pace, India will overtake UK this year.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Austin » 12 Jul 2018 10:48

I thought Nominal GDP value does not matter just GDP PPP

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby yensoy » 12 Jul 2018 11:06

PPP wise we are #3 already https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP). But then again, it can be argued that what really matters is per-capita PPP... So let's stick to nominal because this is how hard business decisions are made.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby A_Gupta » 12 Jul 2018 16:29

NITI Aayog guys think that:
View: India's economy is poised for revival in investment cycle

Read more at:
http://economictimes.indiatimes.com/art ... 952193.cms


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Re: Indian Economy News & Discussion - Nov 27 2017

Postby A_Gupta » 12 Jul 2018 17:05

Bloomberg reports:
The Rupee’s Top Forecaster Is Going Against the Crowd
https://www.bloomberg.com/news/articles ... arian-call
The Indian rupee’s top forecaster is going against the crowd. The currency will strengthen by the year-end, Emirates NBD PJSC forecasts, bucking a growing consensus that sees it hitting new record lows.

The negatives responsible for the rupee’s recent slide -- elevated oil prices and a strong dollar -- have run their course, Aditya Pugalia, Dubai-based director of financial markets at the bank, said in an interview.

“While these factors may continue to weigh on the rupee in the immediate term, they are likely to dissipate in the medium term,” said Pugalia, who had the most accurate estimates in Bloomberg’s quarterly rankings. A proactive inflation-targeting central bank will likely put a floor under the currency over the next three months, he said.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby A_Gupta » 12 Jul 2018 17:37

Disappointing news, via tradingeconomics.com

Industrial Production in India increased 3.20 percent in May of 2018 over the same month in the previous year (previous 4.9%)
Manufacturing Production in India increased 2.80 percent in May of 2018 over the same month in the previous year (previous 5.2%)

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby A_Gupta » 12 Jul 2018 19:15

Bloomberg reports:
https://www.bloombergquint.com/global-e ... low-in-may

India’s industrial activity declined sharply in May mainly due to a slowdown in manufacturing activity, after gathering pace in April.

The index of industrial production rose 3.2 percent year-on-year in May, compared to a revised 4.8 percent in April, data released by the Ministry of Statistics and Programme Implementation showed. A Bloomberg poll of economists had projected a 4.4 percent growth.


The silver lining is that primary & capital goods were healthy.
Thirteen out of the 23 industry groups in the manufacturing sector have shown positive growth during the month of May 2018, compared to last year. The use-based classification showed that production of primary goods rose 5.7 percent, while capital goods’ output advanced 7.6 percent.
Last edited by A_Gupta on 12 Jul 2018 20:47, edited 1 time in total.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby A_Gupta » 12 Jul 2018 20:41

The MOSPI press release is here (PDF file):
http://www.mospi.gov.in/sites/default/f ... uly18r.pdf

In terms of industries, thirteen out of the twenty three industry groups (as per 2-digit NIC-2008) in the manufacturing sector have shown positive growth during the month of May 2018 as compared to the corresponding month of the previous year (Statement II). The industry group ‘Manufacture of computer, electronic and optical products’ has shown the highest positive growth of 27.0 percent followed by 21.1 percent in ‘Manufacture of motor vehicles, trailers and semi-trailers’ and 13.2 percent in ‘Manufacture of furniture’. On the other hand, the industry group ‘Other manufacturing’ has shown the highest negative growth of (-) 31.9 percent followed by (-) 15.6 percent in ‘Manufacture of tobacco products’ and (-) 12.8 percent in ‘Manufacture of wearing apparel’.



As per Use-based classification, the growth rates in May 2018 over May 2017 are 5.7 percent in Primary goods, 7.6 percent in Capital goods, 0.9 percent in Intermediate goods and 4.9 percent in Infrastructure/ Construction Goods (Statement III). The Consumer durables and Consumer non-durables have recorded growth of 4.3 percent and (-) 2.6 percent respectively.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Suraj » 12 Jul 2018 22:31

Sigh, every few months, this thread goes off tangent into the nominal GDP vs PPP GDP argument. In my own opinion, this is a symptom of the general dislike of the fact that our nominal GDP is still in the same group as a bunch of Euro countries, whereas in PPP terms we are far ahead.

The argument that 'nominal is what matter because that's how business decisions are made' is logically inconsistent, because two separate parts are being conflated. Yes, all business is done in current exchange rates. However, the value of the money exchanged varies greatly. Let's take an example of Acme Corp in San Francisco US buying something from Patelji & Sons in Bangalore India for $1 million. The deal value is just that, there's no 'PPP $1 million' here. However, that $1 million goes much different distances in India, and US.

For another example, involving Europeans, recently, UK was kicked out of the Galileo project due to Brexit. They rumbled about going home and building their own regional GPS. Yet, that'll cost them an order of magnitude more than NAVIC/IRNSS (they've already sunk in over 1billion GBP as their share of Galileo, I believe) cost us, even after cost overruns, one failed satellite and one failed PSLV launch.

So the bottomline here is that while trade may indeed be conducted in the nominal exchange rate in vogue at the time, the value of each unit of money exchanged, is not necessarily the same, or even remotely close. Between two equally developed entities, the difference is not much, i.e. there's little exchange rate arbitrage, but between India and any developed world country, there is a massive exchange rate arbitrage baked into any deal, that is part of our cost advantage. This difference, roughly put, is what PPP is about.

That is why PPP matters when you talk about GDPs of two countries at very different developmental points - while trade between them may indeed be in current exchange rates, the distance to which each $/Eur/Gbp exchanged goes in each country is very different.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby rsingh » 12 Jul 2018 22:37

{Deleted. Please avoid such hyperbole and flamebait}

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby nam » 13 Jul 2018 00:08

Since it is a military forum, a perfect example of GDP vs PPP is the size of military between India & UK. Despite having almost the same budget as UK, India is able to maintain a much larger force. Not just in men, but material as well.

This also tells us why it is so important to produce locally. We can maintain a much larger and powerful force for the same money, if majority of the items are produced locally. Some cutting edge tech you import, while produce in large quantity the bread and butter stuff.

The Chinese in 2006 had a currency rate of 16 to a dollar and were 2.3 trillion in GDP. After that they scaled tremendously and this is why despite the exchange being 6 to a dollar now, they are still the preferred manufacturing source.

Cannot stress how important it is for us to produce locally at massive scale, while we have favorable rate at 65-68 to a dollar. It would be brilliant if we are able to keep this rate and scale at the same time. I will still be happy if we are 3 trillion nominal GDP in 10 years, exchange rate still at 68, but massive scale in production.

A good example is the recent Samsung phone factory. They have the brought in Chinese scale of assembling/manufacturing at Indian price. At this scale, Samsung is probably able to produce phones atleast 50% of the Chinese cost.

It is very simple. We producing 120 million phones to Chinese producing 120 million phones, we will be cheaper.

We need to scale.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Suraj » 13 Jul 2018 00:34

nam wrote:This also tells us why it is so important to produce locally. We can maintain a much larger and powerful force for the same money, if majority of the items are produced locally. Some cutting edge tech you import, while produce in large quantity the bread and butter stuff.

Cannot stress how important it is for us to produce locally at massive scale, while we have favorable rate at 65-68 to a dollar. It would be brilliant if we are able to keep this rate and scale at the same time. I will still be happy if we are 3 trillion nominal GDP in 10 years, exchange rate still at 68, but massive scale in production.

This is certainly true. Far more can be accomplished using a domestic industrial infrastructure than from buying abroad. I just want to ensure that this thread doesn't become a version of the the import vs domestic complaining in the Mil forum threads though. The underlying argument though, is indeed sound.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby souravB » 13 Jul 2018 00:43

Very informative and nice debate on Indian Population growth and Resource distribution.
The discussion is in hindi though, so apologies to all non-hindi speaking users.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby A_Gupta » 13 Jul 2018 03:04

nam wrote:Since it is a military forum, a perfect example of GDP vs PPP is the size of military between India & UK. Despite having almost the same budget as UK, India is able to maintain a much larger force. Not just in men, but material as well.


Aha, but PPP is based on a civilian consumer basket of goods.

To be a better indicator, a "military PPP" should be computed that is based on a military basket of goods. E.g., what does it take to support an armored regiment or an aircraft carrier?

On imported hardware, there will be exchange-rate cost parity between India and UK. In military satellites, because India has its own capabilities, India probably beats the exchange rate. Likewise with nukes.

Where the (civilian consumer basket of goods based) PPP works is in what personnel are paid and subsidized, because the pay goes to support them as consumers similar to civilians.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Suraj » 13 Jul 2018 03:50

There's no such thing as civilian and military basket of goods for PPP. The value of industrial output from a MIC also counts as part of GDP regardless of whether it's absolute dollar or PPP figure, or else Soviet Union wouldn't have had much of an economy. When the economy produces a range of goods related to military armaments, it will simply require the goods basket to be accounted to account for the additional base of new products being created in the economy. Right now, military imports simply get subsumed under the big minus sign that constitutes imports in the GDP calculation.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby A_Gupta » 13 Jul 2018 08:14

Really?
http://www.worldbank.org/en/programs/ic ... alculation

Quoting from one of the resources there:

"PPPs are price indexes that serve as spatial price deflators. In addition to being spatial price deflators, PPPs are currency convertors".

PPP = price level ratio * currency ratio

PPPs are calculated in stages: first for individual goods and services, then for groups of products and finally for each of the levels of aggregation unto GDP.

PPPs are spatial price indices. They show -- with reference to a base economy (or region) - the price of a given basket of goods and services in each of the economies being compared.....

PPPs are price relatives that show the ratio of the prices in national currencies of the same good or service in different countries. For example, if the price of a hamburger is €4.80 in France and $4.00 in the United States, the PPP for hamburger between the two economies is $0.83 to the euro from the French perspective and €1.20 to the dollar from the US perspective.


So what happens, when e.g., hamburgers or fur coats are not an item of high utility for Indians?

The composition of the baskets will vary between economies and reflect differences in taste, culture, climate, price structure, product availability, and income level, but both baskets will, in principle, provide equivalent satisfaction or utility.


So, to estimate military potential based on size of economy - or equivalently, how much military does a rupee buy versus a UK pound when normalized as mentioned in the quote above, one must price in both economies a basket of goods and services that reflects what a military would consume.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Suraj » 13 Jul 2018 09:02

The hamburger and other items are - as far as I know - representative examples of methodology . They don’t literally count the number of burgers sold , though there’s another popular index called the Big Mac Index . Those who actually maintain the PPP measures have a significant task to normalize price levels .

I don’t think that example itself is very helpful since, as you mention most people don’t eat burgers . What would be a better measure is aggregate restaurant activity divided into tiers to which rough price levels are ascribed under the assumption that the customers are all eating sufficiently for the price they pay .

This extends to any other area of economic activity including industrial armaments manufacture; unit productions are assumed to have a standard value - eg a bullet is a bullet, and a haircut is a haircut, anywhere - and the ratio of their prices in local currency as an aggregate measure becomes the PPP multiplier .

Another thing - one country had the same PPP and nominal GDP - the US . This is because PPP is an ‘international dollar’ and the measure seeks to represent the size of an economy where all analogous or identical economic activity has the same notional dollar value . If PPP were in fact net of military output, US nominal and PPP GDP figures would not align...

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Austin » 13 Jul 2018 10:47

yensoy wrote:PPP wise we are #3 already https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP). But then again, it can be argued that what really matters is per-capita PPP... So let's stick to nominal because this is how hard business decisions are made.


As per WB per capita ppp were are $ 7000

https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby yensoy » 13 Jul 2018 11:33

PPP is relevant when it comes to labour costs and the essentials of life which tend to be PPP driven - food, clothing, shelter, education and medicine.

When it comes to hard goods, infrastructure, petroleum, commodities, resources and high-tech goods, prices are basically what they are all over the world (give or take a little). The labour part of these tend to be small, and if an arbitrage opportunity presents itself, these goods tend to be imported from overseas.

When a company sets up a plant in India, they look for their net profit. If 10M$ investment is going to earn 1M$ in India, and the same investment earns 2M$ in USA, they will go for the latter, despite "PPP". This is obvious.

When a company wants to build a services team and they have 10M$ to spend, they may rather hire 100 Indians than 25 Americans, subject other constraints.

Therefore, PPP comparisons are beneficial only in discussions relating to labour. In the Samsung case, remember the labour component of a phone is tiny; the savings in building the phone in India over building it in China will probably be less than a dollar per phone all-told, in fact it may still be cheaper to make in China given all the factors. Samsung is setting up the factory mainly to get around customs duties and taxes, and possibly as a long term bet on India with increasing labour cost differential with China.

I am not saying PPP is altogether irrelevant. I am saying that PPP is a measure of prosperity with human centric point of view (how far will my dollar go), therefore it makes most sense when viewed as a per-capita metric. PPP aggregated over the entire country is an academic exercise for the most part.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Suraj » 13 Jul 2018 12:15

yensoy wrote:When a company sets up a plant in India, they look for their net profit. If 10M$ investment is going to earn 1M$ in India, and the same investment earns 2M$ in USA, they will go for the latter, despite "PPP". This is obvious.

This argument does not , in any way , deal with PPP. Conflating wage or labor arbitrage with PPP is a mistake. They are not synonyms.
yensoy wrote:Therefore, PPP comparisons are beneficial only in discussions relating to labour.

PPP is a metric used to normalize aggregate economic activity across multiple economies where the price levels of goods and services are not uniform, for a variety of reasons. It doesn't merely deal with labour; a place like the Persian Gulf has enormous purchasing power if viewed solely in terms of relative cost of petrol, which is a capital intensive fuel with little labor input.
yensoy wrote:I am not saying PPP is altogether irrelevant. I am saying that PPP is a measure of prosperity with human centric point of view (how far will my dollar go), therefore it makes most sense when viewed as a per-capita metric.

I find that to be a completely meaningless argument, not because a per-capita measure itself is wrong, but because PPP has nothing to do with it. Regardless of what measure you choose - even the Big Mac Index - it matters how much each person earns.
yensoy wrote:PPP aggregated over the entire country is an academic exercise for the most part.

Unfortunately that is wrong. PPP provides a means to normalize economic activity across different countries with different price levels of goods and services.

It's a vastly better option for this purpose than nominal GDP, which tells you absolutely nothing about aggregate economic activity when price levels are hugely different. It is even more meaningful in present economic structures where typically 55-60% of economic activity is services, and not the production of goods (whose raw material costs are mostly the same everywhere) . The cost of labour and services on the other hand, diverges enormously. Nominal GDP figures do not capture that at all, not on an aggregate basis and particularly not on a per-capita basis.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Austin » 13 Jul 2018 15:31

Latest figures for GDP Nominal 2017 from World Bank

http://databank.worldbank.org/data/download/GDP.pdf

chola
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Re: Indian Economy News & Discussion - Nov 27 2017

Postby chola » 13 Jul 2018 17:28

Suraj wrote:
yensoy wrote:When a company sets up a plant in India, they look for their net profit. If 10M$ investment is going to earn 1M$ in India, and the same investment earns 2M$ in USA, they will go for the latter, despite "PPP". This is obvious.

This argument does not , in any way , deal with PPP. Conflating wage or labor arbitrage with PPP is a mistake. They are not synonyms.


But Yensoy is right in that PPP is really meaningless to global corporations. It might make sense for local planning.

But in the end, you use pure sales figures over any gross national produce numbers anyways.

For example, we are nearly half of Cheen’s PPP but we consume anywhere from a tenth to a twentieth of what they consume for most durables and white goods. For example, they bought 25M automobiles in 2017 to our 4M. And they can afford more expensive things like imported movies. Bollywood flicks routinely make 3000 crores in Cheen when a “blockbuster” in India is defined as 1000 crores. In the case of Dangal and Secret Superstar, their takes were 13000 and 7000 crores respectively in Cheen.

If I were a MNC or a Bollywood mogul, the PPP figures are meaningless and reflect nothing of value to me.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby RKumar » 13 Jul 2018 17:34

souravB wrote:Very informative and nice debate on Indian Population growth and Resource distribution.
The discussion is in hindi though, so apologies to all non-hindi speaking users.


Very good and positive discussion ... unlike ran-ndtv rona dona.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Austin » 13 Jul 2018 18:50

Mukesh Ambani Topples Jack Ma as Asia's Richest Person

https://www.ndtv.com/india-news/mukesh- ... rpush=true

Mukesh Ambani overtook Alibaba Group founder Jack Ma to become Asia's richest person as he positions Reliance Industries Ltd. to disrupt the e-commerce space in India.

The chairman of India's refining-to-telecoms conglomerate, Ambani was estimated to be worth $44.3 billion on Friday with Reliance Industries Ltd. rising 1.6 percent to a record 1,099.8 rupees, according to Bloomberg Billionaires Index. Ma's wealth stood at $44 billion at close of trade on Thursday in the U.S., where the company is listed.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Katare » 13 Jul 2018 20:50

Did anyone find the original Brooking's Institute report on poverty that these articles are quoting from?


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