Indian Economy News & Discussion - Nov 27 2017

[Prasad]

Posting here for now. Will move elsewhere or delete if posters cannot stay on topic:
US makes last-ditch effort in urging India to go easy on data localisation

Two US senators have called on Prime Minister Narendra Modi to soften India’s stance on data localisation, warning that measures requiring it represent “key trade barriers” between the two nations.

In a letter sent to Modi on Friday and seen by Reuters, US Senators John Cornyn and Mark Warner — co-chairs of the Senate’s India caucus that comprises over 30 senators — urged India to instead adopt a “light-touch” regulatory framework that would allow data to flow freely across borders.

Global payments companies including Mastercard, Visa and American Express have been lobbying the finance ministry and the Reserve Bank of India (RBI) to relax proposed rules that require all payment data on domestic transactions in India be stored inside the country by October 15.

The letter is most likely a last-ditch effort after the RBI told officials at top payment firms this week that the central bank would implement, in full, its data localisation directive without extending the deadline, or allowing data to be stored both offshore as well as locally — a practice known as data mirroring.

This is "strategic economics" if you will. Losing direct access to financial transactions, even if we gave in with FATCA, will be a blow for them and raise costs for visa & MasterCard. This is where the Chinese are ahead of the game and partnered with paytm and plugging into their existing system and promising local storage for fin data and local assembly (they slyly call it manufacturing) of mobiles.
Americans want access to data but have strict standards as to who gets access to hardware they use but everybody else should be open. China is the opposite and we're trying to be the middle ground. If we don't stand our ground, we'll give away too much.

[Suraj]

India held this #1 position since around 1997 when Chinese extreme poverty fell below ours.

[Karthik S]

That's 5% of the population, what would be better indicator is the percentage of population living in extreme poverty. That would give a better idea about how various countries fare.

[Varuna]

India is down to 64.8 million already (https://worldpoverty.io/)

[Suraj]

Mod Note

I've cleaned up posts that the original poster himself admitted were off-topic. There are about half a dozen active threads about that place, to talk about that. Do it there.

[Trikaal]

^I do not understand this hatred for chinese phones. They are already getting taxed. Not everything has to be make in India. If the customers get a price advantage then India as a whole benefits, doesn't it? Instead of blind hatred, we should tax these products healthily and as china (or any other country) loses price advantage, the industry will automatically shift to India. We already see this happening as manufacturing ecosystem slowly is shifting to India. Statements like 'firing' paytm and flipkart seem uncalled for.

[Bart S]

^I do not understand this hatred for chinese phones. They are already getting taxed. Not everything has to be make in India. If the customers get a price advantage then India as a whole benefits, doesn't it? Instead of blind hatred, we should tax these products healthily and as china (or any other country) loses price advantage, the industry will automatically shift to India. We already see this happening as manufacturing ecosystem slowly is shifting to India. Statements like 'firing' paytm and flipkart seem uncalled for.

Yes, they are at least way better than the low quality imported Chinese trinkets that are sold by most shopkeepers, that are likely imported using corrupt means.

[Karan M]

^I do not understand this hatred for chinese phones. They are already getting taxed. Not everything has to be make in India. If the customers get a price advantage then India as a whole benefits, doesn't it? Instead of blind hatred, we should tax these products healthily and as china (or any other country) loses price advantage, the industry will automatically shift to India. We already see this happening as manufacturing ecosystem slowly is shifting to India. Statements like 'firing' paytm and flipkart seem uncalled for.

They are huge security hazards, apart from the concerns about forex outflow.

[Suraj]

^I do not understand this hatred for chinese phones. They are already getting taxed. Not everything has to be make in India. If the customers get a price advantage then India as a whole benefits, doesn't it? Instead of blind hatred, we should tax these products healthily and as china (or any other country) loses price advantage, the industry will automatically shift to India. We already see this happening as manufacturing ecosystem slowly is shifting to India. Statements like 'firing' paytm and flipkart seem uncalled for.

Please stop trolling in this thread. Next action on your part earns a warning or ban.

[Trikaal]

They are huge security hazards, apart from the concerns about forex outflow.

Security concerns can be addressed by proper examination of models and apps. As for foreign exchange outflow, yes that is true. But isn't that a part of the global trade? Besides, I feel items like mobiles have a multiplier effect on the economy by enhancing productivity of individuals. The reason internet access is increasing rapidly in India today is because the people have access to cheaper smartphones.


@Suraj I do not understand how I am trolling. It is not my intention and I feel that what I wrote was related to the Economics thread and the reply to a prev poster. An explanation would be much appreciated.

[Suraj]

@Suraj I do not understand how I am trolling. It is not my intention and I feel that what I wrote was related to the Economics thread and the reply to a prev poster. An explanation would be much appreciated.

Since you asked - YOU constructed the strawman of "hatred for chinese phones". Don't bring in such nonsense to this thread. Posters are expected to be aware of nuances and not appeals to emotion. You have a past record of being a thread disrupter and will get even less leeway in this regard.

I see you joined a year ago. The topic has been discussed at length here. A forum search on micromax should yield pointers to the prior discussion.

[Trikaal]

Since you asked - YOU constructed the strawman of "hatred for chinese phones". Don't bring in such nonsense to this thread. Posters are expected to be aware of nuances and not appeals to emotion. You have a past record of being a thread disrupter and will get even less leeway in this regard.

I see you joined a year ago. The topic has been discussed at length here. A forum search on micromax should yield pointers to the prior discussion.

The post was in reply to a recent post suggesting 'firing' the companies which i construed as hatred. But I will refrain from using such words in future.

Yes,I joined a year ago, but I was inactive for a majority of that duration.

[Katare]

Trikaal, the problem is that we have to pay in dollars for those phones. They can easily be produced by even Chinese in India, that would be acceptable to me. Can’t waste our dollars on phones

[JayS]

Trikaal, the problem is that we have to pay in dollars for those phones. They can easily be produced by even Chinese in India, that would be acceptable to me. Can’t waste our dollars on phones

The problem is not only one of currency only but trade deficit too. Whichever currency we pay the phones for, until there is large net outflow of money from India to China (or any other country for that matter) it is not sustainable in long term. By enforcing manufacturing in India we do reduce the quantum of money outflow, but may not eliminate it completely (import cost of subcomponents and profit will fly out of the country). And this is not just about phone but any product or service.

Think about it, if we pay all the goods and Services we buy from China in INR, what would happen? China ends up with a lot of INR. A small part of it they will use to pay back to us for goods and services, because we can export only so much as of now. The rest of the INR will eventually be dumped in International currency market for USD or RMB, which will cause devaluation of INR eventually. The currency dynamics plays out more or less in the same manner whether we pay in INR or USD unless we have enough exports to get back the INR or the INR has enough usability/credibility in international market like USD that it can be used to trade with other countries. Both are not there as of now. We may delay the eventuality by tactics like paying in INR, bringing MFG in India and so on, but eventually we need to balance the trade. I dont see how we can do that with China in even coming decade. There are a lot of factors to be consodered and the matter is bot a sime one definitely. But reducing buying Chinese stuff any whichway is good as of today.

[Katare]

Correct and well put!

[Suraj]

In addition, there are often comments paraphrasing David Ricardo and the concept of relative benefit , to suggest that since Chinese make these cheaper, it's better to buy it than make it in India. However this argument has a logical fallacy.

The Chinese didn't end up competitive by accident. Their competitiveness is a result of sustained policy efforts to bring mass manufacturing to their shores. We are primarily a competitor in the same effort , and not a customer of their wares. We want to bring mass manufacturing to OUR shores. This isn't about the phones. It's about having the industrial base here in India, not buying finished goods from China. Buying finished goods means someone else got the benefit of employing a workforce in manufacturing, and the value add achieved from it, whereas we are solely buyers, forced to obtain a foreign currency to purchase products we are end consumers of.

Our economic goals are to bring value addition business and mass manufacturing to our shores. There's no sustainable policy that can work by importing Chinese goods and turn us into a nation of traders hawking those goods to one another. The reason is that without actual THINGS of value being produced, we cannot sustain a wage level that can consume those physical goods being imported by 'a nation of traders'.

The only way we can sustain a market for goods, is to also produce the goods and build a clase of wage earning people in secondary industries generating goods.

Our trade deficit is a major problem. A few months ago, I did a breakdown of that month's merchandise trade figures . We run a sustained merchandise trade deficit. We barely breakeven, net of oil imports even. That's not a prudent economic situation to be in. To quote the figures in that post:

Petroleum $11 billion
Coal $2.5 billion
Gems $3 billion
Electronics $5 billion
Chemicals $2 billion
Resins/plastics $1.4 billion
Nonferrous metals $1.2 billion
Machinery $3.4 billion
Transport equipment $1.8 billion
Gold $2.4 billion

TOTAL $41 billion

In other words, electronic goods are a $5 billion MONTHLY import bill, $72-75 billion a year. That's several squardons of MRCAs and aircraft carriers worth of money going out every year, to feed consumer demand. Sorry, that's a bill we can and should entirely eliminate, and run a surplus in its place, by manufacturing them within India and being an export base instead.

[JayS]

In addition, there are often comments paraphrasing David Ricardo and the concept of relative benefit , to suggest that since Chinese make these cheaper, it's better to buy it than make it in India. However this argument has a logical fallacy.

Yep. What works for the US would not work for India. When US offloads its manufacturing to China and gets benefited by cheaper good (they get more bang for the buck), they end up with large trade deficit. But the US can afford to run large deficit because of USD' status of reserve currency. If US starts running net trade surplus account, the USD liquidity will reduce and USD will become too costly and eventually rest of the world will find another medium to do business with. US runs deficit account with almost every trade partner. And the Chinese and Japanese invest back the surplus USD in the US. Its a win-win situation for the US. One that is chiefly due to the reserve currency status of USD. We don't have that luxury. No other country, apart from US, has been able to maintain strong global position without running sustained trade surplus accounts.

Had it been a case where we were running surplus account against China, we could have taken advantage of their cheap manufacturing. But the fact is we don't. And we have our own population to provide jobs for, our own GDP to bump up. We cannot be totally Agri and Service based economy. We need large manufacturing sector contributing at least 30% of GDP. Plus the manufacturing prowess has a National Security angle too, which may seem intangible but its all too important.

[VenkataS]

Yep. What works for the US would not work for India. When US offloads its manufacturing to China and gets benefited by cheaper good (they get more bang for the buck), they end up with large trade deficit. But the US can afford to run large deficit because of USD' status of reserve currency. If US starts running net trade surplus account, the USD liquidity will reduce and USD will become too costly and eventually rest of the world will find another medium to do business with. US runs deficit account with almost every trade partner. And the Chinese and Japanese invest back the surplus USD in the US. Its a win-win situation for the US.

Even the US situation is not sustainable over the long term. As the Chinese economy eclipses US over the next decade and starts to distance itself from the US in terms of economic output, the status of USD as the reserve currency might be in Jeopardy. The Chinese will look for ways to take over the mantle for having the Worlds reserve currency as well.

We should absolutely compete fiercely to take over the low-end/mid-end manufacturing from the Chinese as long as we are in the middle of our demographic dividend. To not do that will be a tremendous mistake on our part.

We need to get the basics right here cheap (always on) power, good road/rail connectivity, decent ports and the right labor laws.

[Trikaal]

In other words, electronic goods are a $5 billion MONTHLY import bill, $72-75 billion a year. That's several squardons of MRCAs and aircraft carriers worth of money going out every year, to feed consumer demand. Sorry, that's a bill we can and should entirely eliminate, and run a surplus in its place, by manufacturing them within India and being an export base instead.

I feel like you are confusing two separate issues here. Trade imbalance amd deficit with china is certainly a problem which should be addressed. However, making sweeping statements like 'electronics bill needs to be reduced' are wrong imo.

First off, India earns a healthy tarrif on import of these items. That money is going in GOI's pocket and helping build infrastructure and employing people. So if people are still importing 5 billion worth of electronics per month that means that this demand isn't artificial. Artificial demand, like in case of pakistan where demand was because of cheap imported electronics(due to their artificially low currency) is bad. Suppressing genuine consumer demand is detrimental for our economy.

Second, this is not a simple numbers game. The 5 billion dollar electronics have a multiplier effect which is hard to express in numbers. More computers means more indians developing and exporting software services. More mobiles mean more business efficiency.

Thirdly, yes, we definitely do need to attract manufacturing into india. And that's happening already. Companies like oppo, xiaomi, and samsung have established local plants. Sub-component manufacturing will also come over time. The need is to improve policy and offer incentives rather than just blanket ban companies.

Lastly, importing electronics like 5g tech allows indian companies to maintain technological competency with global rivals.

Just my two cents.

[Supratik]

Who is opposing any of these. All these can be done by manufacturing in India as well. It builds up industrial base, gives jobs and builds up an ecosystem for further technological development. You want India to be the baby sucking the milk bottle in class 12. No one asked for a blanket ban.

Meanwhile, India rises five places in global competitive index.

[Trikaal]

You want India to be the baby sucking the milk bottle in class 12.

Meanwhile, India rises five places in global competitive index.

No,I want India to compete in fields(manufacturing and others) where we already have an advantage instead of getting into tarrif wars with countries in an attempt to blindly reduce import bill. Instead of fighting entire south-east asia just to make mobiles in india faster(which is anyway going to happen as our labour cost advantage widens) we should be pressing these countries to reduce import barriers on our exports. Instead of worrying about imports of essential stuff, we should be looking to widen our export basket.

[Kashi]

Instead of worrying about imports of essential stuff, we should be looking to widen our export basket.

Why can't we do both? Why does it have to be either this or this?

[Trikaal]

Why can't we do both? Why does it have to be either this or this?

We can and we should, but in a non-confrontational manner. Which means providing incentives, instead of ban threats and market denial. Which brings me back to my first point, import of electronics shouldn't be banned.

[Rahulsidhu]

Interesting discussion on the trade deficit -- and it's good to see both sides recognize that it is a major problem. To state something obvious, there are two essential ways to curb a trade deficit: raise exports and curb imports.

Raising exports is the preferred method: it solves the problem by forcing domestic industry to compete in foreign markets. This is really the only path to prosperity. However, the problem with raising exports is that there is no magic wand for this.

OTOH, imports can be curbed relatively easily but could come at a very high cost. Licence Raj India tried to do this exclusively with disastrous consequences.

In the present day, my view is that Modi govt. has been doing well with duty hikes on electronics etc. The phased manufacturing plan is working. This is a major achievement that will only bear fruit in the decades to come. But this approach is easy to overdo -- and therein lies its risk.

At the end of the day, the real problem is that Indian domestic industry still doesn't compete enough abroad. As the rupee slid precipitously a few weeks ago, there was an article on the Indian auto industry which surprised me -- apparently the auto industry is still a net importer and is being hurt by the rupee slide. I think this says a lot -- Autos is one rare manufacturing success in India yet it still can't export enough to be a net exporter (there is nothing wrong in importing raw materials).

TL;DR Indian industry needs to compete internationally and export a lot more. This is the only way out of this mess. Until this can happen, the rupee will slide and we will remain a poor country.

[Trikaal]

TL;DR Indian industry needs to compete internationally and export a lot more. This is the only way out of this mess. Until this can happen, the rupee will slide and we will remain a poor country.

Exactly, which is why more focus should be on exports. Actually, this is what is being done right now too. Because of US threats, China has shown willingness to reduce import barriers for Indian products like non-basmati rice and medicines. We should use this opportunity to continue to force the chinese to provide us greater market access.

Additionally, we should focus on manufacturing tax breaks and cheaper and regular power supply to make our manufacturers more competitive globally.

[Suraj]

I feel like you are confusing two separate issues here. Trade imbalance amd deficit with china is certainly a problem which should be addressed. However, making sweeping statements like 'electronics bill needs to be reduced' are wrong imo

We can all be glad these are only your opinions and not what the government is doing

First off, India earns a healthy tarrif on import of these items. That money is going in GOI's pocket and helping build infrastructure and employing people.

Do you think the Chinese are paying the tariffs, when India (or US) applies them on Chinese imports ??? That tariff is a tax on YOU - it is YOU whom the government is targeting here. It's *Indian people themselves* who are paying them. When tariffs are applied, either the importer raises the per unit MSRP, or lowers sales volume. The only impact on the Chinese is that by forcing up the prices or forcing down volume, it gives the tariff applying entity a means to lower imports from that country.

You seem to be under the fantastic impression that when India applies tariffs, the Chinese grudgingly reach into their purse and hand us extra free money that goes into 'infrastructure and employ people'. No, it's YOUR pocket that's being raided, and you are being taxed more, to get you to stop the addiction to that imported item.

So if people are still importing 5 billion worth of electronics per month that means that this demand isn't artificial. Artificial demand, like in case of pakistan where demand was because of cheap imported electronics(due to their artificially low currency) is bad. Suppressing genuine consumer demand is detrimental for our economy.

That's not 'consumer demand' . Demand is backed by purchasing power and doesn't drain the economy or capital. What you're calling 'demand' here is just wants. If you ran a strawpoll of rural households asking "do you all want cellphones, LCD TVs, cars, almirah of sarees, washing machine, fridge, microwave" you'll get overwhelming YES, proving the existence of incredible "demand" for everything. Except that practically no one can afford all that if offered for purchase. On a more destructive note, the Chinese demonstrated enormous demand for opium at one time, and the Americans do for opoids now.

That's what this "demand" is - the country is bankrupting itself, sending its currency down 15%, running a trade deficit larger than all but a handful of countries, and that deficit is paid for by the Indian worker who has to create enough economic value for India to buy the increasingly expensive dollars to pay the difference between exports and imports. And the tariffs applied ? YOU the consumer are paying that too.

Second, this is not a simple numbers game. The 5 billion dollar electronics have a multiplier effect which is hard to express in
numbers. More computers means more indians developing and exporting software services. More mobiles mean more business efficiency.

You talk about 'multiplier effect' and simultaneously say it's not a numbers game. What do you think gets written on both sides of a multiply sign ? One of the most stresses industries with highest NPA risk - is the telecom industry, who can't sustain the 'demand' on the back of the ridiculously small ARPUs they've to live with, and that's because people can't afford to pay for the services they demand, because they don't have the purchasing power and wage levels to support it.

Thirdly, yes, we definitely do need to attract manufacturing into india. And that's happening already. Companies like oppo, xiaomi, and samsung have established local plants. Sub-component manufacturing will also come over time. The need is to improve policy and offer incentives rather than just blanket ban companies.

Once again, you're trolling here by placing words in people's mouths like 'blanket ban'. If you're referring to Flipkart or such, they're not a manufacturer of anything, just an online portal. "We are going to make it too expensive for you to import your goods here, and we'll make it cheaper for you if you set up manufacturing facilities here" is a perfectly acceptable economy policy.

Lastly, importing electronics like 5g tech allows indian companies to maintain technological competency with global rivals.

There's no technological competency in being an importer of finished goods comprising IP developed elsewhere.

Just my two cents.

I understand your heart is in the right place, but please, just be a lurker of the thread, at least until you're sufficiently familiar. This thread doesn't lend itself to disruption in this manner, and I don't want to have to warn or ban you for being disruptive, and would rather you just lurked. However, if you continue to be disruptive, that will be the next step.

[Rahulsidhu]

TL;DR Indian industry needs to compete internationally and export a lot more. This is the only way out of this mess. Until this can happen, the rupee will slide and we will remain a poor country.

Exactly, which is why more focus should be on exports. Actually, this is what is being done right now too. Because of US threats, China has shown willingness to reduce import barriers for Indian products like non-basmati rice and medicines. We should use this opportunity to continue to force the chinese to provide us greater market access.

Perhaps I should have added the caveat that exports of primary products is not the solution (and often counterproductive and a red flag). For one, they will never contribute significantly to the numbers. More importantly, they will not help push the country higher up the tech. curve or generate high quality jobs.

The opening up of rice imports by China was nothing but a distraction and a PR exercise.

[Suraj]

Excellent point - a trade profile primarily demonstrating exports of primary and intermediate goods, and imports of finished goods, is lopsided.

[Suraj]

Services trade continues to remain robust through August
August 2018
Exports: $16.5 billion
Imports: $10.4 billion

Apr-Aug 2018:
Exports: $84.7 billion
Imports: $52.7 billion
Surplus: $32 billion

[Supratik]

These are not trade barriers. These are measures to disincentivize imports of electronics and incentivize local manufacturing by the "same companies".
So you are going to get the same product but made in India. The benefits are local jobs and building an ecosystem that can be leveraged for further industrialization.

[Vadivel]

One of my friend asked (he is into sales of printing machinery, japanese).

"Why is are the Indians not copying, reverse engineering? We did in 60's, the chinese are doing now, why are indian companies still buying printing machinery, that too old ones from Japan?" I think he missed out on Koreans.

Why is there no culture to reverse engineer here, only do some jugaad stuff.?

[Suraj]

India investment upswing to run till 2022-23; RBI study of investment cycles since 1950 has good news

A study of India’s investment cycles in the last 60 years by the Reserve Bank of India (RBI) has revealed that the latest investment upswing will run till 2022-23 to the peak of 33% from the current rate of 31%. A working paper titled ‘India’s Investment Cycle: An Empirical Investigation’, which studied the pattern since 1950, found that the real investment rate in India followed a three-year cycle, with nine episodes of contraction/upturn of two years.

“The current upturn in the investment cycle is estimated to last up to 2022-23 when the investment rate could rise to 33.0 per cent from the current rate of 31.4 per cent,” the RBI paper said. It said that investment activities in India were heavily influenced by economic activity, real interest rate and bank credit.

“The gross fiscal deficit crowds out investment activity,” the paper noted. Crowding out is a situation where increased interest rates lead to the fall in private investment spending. The investment activity declined sharply from 2011-12 to 2015-16 before beginning to pick-up in 2017.

The investment activity in India was affected by several macro-financial factors such as GDP growth, global GDP growth, bank credit growth etc, the study said. The real interest rate had a direct negative impact on investment levels, while non-food bank credit growth had a positive impact on investments. “A one percentage point increase in the real lending rate reduces the real investment rate in the range of 0.29-0.40 percentage points,” the study concluded.

[Suraj]

While this seems like boring news, it's in fact extremely important. The US used to have weak economic data collection prior to the Great Depression. They made multiple bad decisions that worsened that depression because they'd very little helpful data to calibrate policymaking. They learned from that and have since built up a detailed databank of economic data to enable policymaking. Similarly, we cannot make proper decisions if we don't know what's happening on various economic fronts - jobs (rural, urban, services/manufacturing/farm), cost of capital, core sector etc.
MoSPI to anvil national-level data warehouse soon, to be one-point source of all official statistics

The Ministry of Statistics and Programme Implementation (MoSPI) is coming up with 7th economic census for 2019. The census, coming after a gap of five years, will focus a national-level data warehouse which will collate all official statistics. It will also cover GDP related data and three surveys regarding services, unincorporated enterprises and time use.

MoSPI is expected to release national-level data warehouse within next six months. Employment and Household Consumer Expenditure related surveys will also also expected to come out in a couple of months, Chief Statistician of India Pravin Srivastava told Indian Express.

Talking about National Data Warehouse he said, “MoSPI is working to collate all the official statistics in a National Data Warehouse. There will be a repository vault where all statistical information like surveys and administrative systems will be collected. This prime project will streamline the availability of data across departments, ministries, sectors and state governments. Everyone will have access to same set of data,” Indian Express quoted Srivastava as saying.

[sanjaykumar]

One of my friend asked (he is into sales of printing machinery, japanese).

"Why is are the Indians not copying, reverse engineering? We did in 60's, the chinese are doing now, why are indian companies still buying printing machinery, that too old ones from Japan?" I think he missed out on Koreans.

Why is there no culture to reverse engineer here, only do some jugaad stuff.?

There is no culture of hard work. I once posted on how I wanted to buy a point of care ultrasound device on line- the Chinese response was a professional website to provide several model options, the Indian response was zero. The Indians were offering used western or Chinese machines.


What was telling was the reply of one august BRF poster who creatively found several great reasons why the Indians were so lackadaisical.

[Suraj]

HSBC World in 2030 Report: India likely to emerge as the third-largest economy in the world

India is likely to emerge as the third-largest economy in the world in just over a decade from now, surpassing Japan and Germany, according to a new report from HSBC Global Research. As seen in Chart 1, China is projected to be the largest economy in the world by 2030, followed by the US and India.

According to the report, the advanced economies of Denmark and Norway are likely to be the biggest losers in the coming decade, falling nine and ten positions on global rankings, respectively. On the other hand, as seen in Chart 2, countries like Bangladesh and the Philippines will be the biggest gainers over this period.

In part, these countries, along with India, will benefit from the demographic dividend. These countries will have a faster-growing working-age population (Chart 3) and young people should become more productive particularly as education rates continue to rise across the emerging economies. Further, there are also the benefits from technological catchup (Chart 4).

HSBC Original Report

[souravB]

A Hypothetical question to the gurus.
Given a choice, which should be GoI's focus from 2019 onwards,
go up in HDI and get whatever growth as a result of that
or
go up in scale of economy and get whatever HDI as a result
What scenarios might come to pass in 10-12 years if we follow one of them?

I am asking this question because I believe the GoI can do much much more now with the resources we have and there is still indecision in governments part to commit fully to its ideals.

added later:
Aside from per-capita income, I am including other indicators which are quantifiable like level of education, Healthcare, IMR, benefits, resources and also non-quantifiable indicators like quality of education, affordability and availability of healthcare, general happiness, approach to law etc.
I do not want to base this on per capita income because there is a huge disparity in wealth distribution and only the number doesn't represent the full picture. Our PCI is ~Rs110000/month but there is still quite a large population that falls way below the median mark of this.

[Suraj]

You'll need to explain why you think they're different goals. Per capita Income itself is one of the important measures of HDI...

[Dumal]

One of my friend asked (he is into sales of printing machinery, japanese).

"Why is are the Indians not copying, reverse engineering? We did in 60's, the chinese are doing now, why are indian companies still buying printing machinery, that too old ones from Japan?" I think he missed out on Koreans.

Why is there no culture to reverse engineer here, only do some jugaad stuff.?

There is no culture of hard work. I once posted on how I wanted to buy a point of care ultrasound device on line- the Chinese response was a professional website to provide several model options, the Indian response was zero. The Indians were offering used western or Chinese machines.

What was telling was the reply of one august BRF poster who creatively found several great reasons why the Indians were so lackadaisical.

The outward symptoms - no culture of hard work etc - may be spot on. However could there be a deep underlying real and psychological gap when it comes to investing significant amounts of money and being ready to sometimes lose it? Today, the business environment may be looking up and more stable, with this government in place. However that was probably not the case at all throughout the past 70 years and certainly into the prior 500 years. (I don't mean to make this a BJP vs others debate, but the difference is obvious.)

In my personal case, I have a quite a few ideas that can be converted into innovative solutions that will serve our local needs and potentially develop legs to grow internationally. But I am very scared to put my hard-earned money into something at the risk of losing it. We know now that there is a privileged coterie that can get huge loans and then refinance forever without paying back etc., but they usually end up siphoning the money out for whatever other purposes and not always to grow their business and competitiveness. The support system for first-gen entrepreneurs is not very strong yet.

Today, I heard of a young couple with children from the lower-income strata who started a commercial set-up but unforeseen repair/maintenance costs drove them into bankruptcy and were literally starving for months before getting back up surviving through regular salaried work. I doubt if they will put any money into even the slightest risk for a long while.

[Suraj]

added later:
Aside from per-capita income, I am including other indicators which are quantifiable like level of education, Healthcare, IMR, benefits, resources and also non-quantifiable indicators like quality of education, affordability and availability of healthcare, general happiness, approach to law etc.
I do not want to base this on per capita income because there is a huge disparity in wealth distribution and only the number doesn't represent the full picture. Our PCI is ~Rs110000/month but there is still quite a large population that falls way below the median mark of this.

You still haven't answered the question. Why do you feel the two are disconnected such that they are an either/or priority ? Quality of labour is very directly tied to economic growth.

[abhijitm]

Its not that we are lazy. It is mainly the business financing for middle and lower middle class, and the ecosystem is unforgiving for failure when in businesses it is the major concern.