Indian Economy: News and Discussion (Apr 1 2011)

Singha · Post by **Singha** » 09 Nov 2011 11:39

NAC >> CCEA thats the root cause. we have a unofficial cabal of 'intellectuals' and 'activists' ruling the country by proxy. CCEA just obeys the faxed memos.

Dr MMS can do nothing. his three seniormost ministers AK, PC and P'da probably just bypass him and do whatever they want or 10Janpth wants. and they dont seem to agree on many issues anyway.

vera_k · Post by **vera_k** » 09 Nov 2011 12:17

The rupee needs to be devalued by 30-50% to give export led manufacturing a boost in the face of the infrastructural challenges and competition from PRC. IMO MMS knows this very well, so is willing to create the conditions to justify such a devaluation.

Aditya_V · Post by **Aditya_V** » 09 Nov 2011 12:26

UPA -I did the damage but got away with it since they were riding on a good foundation and global economic boom from 2004-07. UPA-II is now facing the consequences.

This has turned a blessing in disguise for NDA. Had they won in 2009, they would be facing the music now. Now the UPA is having nowhere to Hide since no amount of PR exercise (i.e Media control) can hide their mismanagement and loot.

gakakkad · Post by **gakakkad** » 09 Nov 2011 17:19

1 JNU/NAC jholawaala can nullify the enterprise an industriousness of 1000 top profs...I always said that NAC is a bigger danger than Pakistan/China combined...

Now they want to pass the food security bill...

So here is how the budget 2012 will look like...

100 Billion USD == on the ill conceived puerile food sec. bill
20 billion NREGA
40 BILLION ENERGY Subsidy
10 billion -misc. subsidies

170 billion(9% GDP) of taxpayer money swindled by the Jholawalas for the nefarious corruption schemes...

Is India salvageable ?

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Those who are thinking that it is a Chankian move by the gov't to increase exports are day dreaming...MMS knows this is the disaster in the making...but can't do much...

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This is the reason I was supporting Montek on Rs 32 BPL.... He is right in saying, that poverty is over-estimated... Montek wants to remove oil subsidies ...He is against the FSB...MMS does not have the say in the gov't which is run by the communist fascist nazis of NAC and Gandhi.. Many Brfites were then lambasting Montek. They did not realise that by criticising Montek they were supporting Aruna Roy and NAC...

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A mere kick in the butt won't suffice with this Gov't .. It needs its musharraf impaled by a hot iron rod... IMHO the gov't is purposefully creating the mess..In the pre-liberalisation era usually one the elections by huge margins and got 400 seats ...It is only after 1991 that a credible ,powerful opposition emerged... They wanted to go back to the pre-lib era when they one elections after election in spite of gross mis-rule.. But they did not anticipate the power of middle class this time and they ll be trumped..Thanks to inflation even poor will be against them...The only agenda they are going to UP with is appeasing the deobandis...they ll be trumped badly aoa...

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Question to economy guru's-- Can India by salvaged from here onwards ? Where is the SCM ..Our in house Jholawaala ? lets see if he manages to out argue us on this one...too much of a mess for anyone to defend..

Vasu · Post by **Vasu** » 09 Nov 2011 17:43

vina wrote:
Oh, well. In India things happen only if there is a crisis. So maybe, that is exactly what the doctor ordered and it will only be a macro crisis that will force Dr MMS' govt to do the right things.

Vina saar this has been my opinion exactly. I think India (rather, the well to do and middle class India) has been living in this extreme hubris for the past few years that we can do no wrong. We can do trade with the world and rack up billions in M&A and yet remain unaffected because of our 'strong fundamentals'. This ostrich like attitude needs to break down.

I am sure the CON party must've done enough scenario analysis for an economic crisis in the country. Such a time would be opportune for Raul Maino to come in as the knight in shining armour. Except that he doesn't have a commanding personality at all.

gakakkad · Post by **gakakkad** » 09 Nov 2011 17:46

>>I am sure the CON party must've done enough scenario analysis for an economic crisis in the country. Such a time would be opportune for Raul Maino to come in as the knight in shining armour. Except that he doesn't have a commanding personality at all.

Con party feudal lords will have his balls for fried olives if he takes over ..especially at the time of a crisis...

Aditya_V · Post by **Aditya_V** » 09 Nov 2011 18:07

gakakkad wrote:1 JNU/NAC jholawaala can nullify the enterprise an industriousness of 1000 top profs...I always said that NAC is a bigger danger than Pakistan/China combined...

Now they want to pass the food security bill...

So here is how the budget 2012 will look like...

100 Billion USD == on the ill conceived puerile food sec. bill
20 billion NREGA
40 BILLION ENERGY Subsidy
10 billion -misc. subsidies

170 billion(9% GDP) of taxpayer money swindled by the Jholawalas for the nefarious corruption schemes...

Is India salvageable ?

.................

You can add anther 100,000 INR- 25 Billion for Farm Loan write offs.

Increase ED 10% to 16%, IT from 33.2175% to 35% through additional cess etc etc, and develop revenue Targets expecting no impact on business due to higher taxes and High Interest rates, net result Industry collapses, subsidies balloon and defecit hits record levels, leading to high inflation.

Theo_Fidel · Post by **Theo_Fidel** » 09 Nov 2011 22:44

Real problem is that despite UPA disastrous governance, Yindia keeps growing only. In 1991 during economic collapse, growth rate was negative. This year it is still 7%. From what I see in Chennai it has got be much much higher growth rate.

In Chennai there is absolutely no sign of any slow down only. The place is absolutely booming and money flowing like no ones business. I was a Kelambhakkam near Mahabalipuram and there is an entire city that has popped up. Looks like about $2-3 Billion worth of investment. You will be hearing about Kelambhakkam in the same breath as Sriperumbudur shortly.

Even at 7% growth rate a $2 Trillion economy is adding about $150 Billion to itself every year. Assuming a tax rate of 25%, about $40 Billion+ will be rolling into GOI coffers additional every year. This unfortunately means the GOI can afford these cash extravaganzas and in a couple of years it will become a rounding error. Yindian growing wealth is 'enabling' UPA addiction to cash melas.

Only good thing is GOI appears to finally be spending some serious cash on infrastructure.

Suraj · Post by **Suraj** » 10 Nov 2011 06:52

A one month drop in export growth to just around 13% growth rate is not reason enough to call exports 'stagnant'. Both calendar year and fiscal year growth rate so far has been north of 25% as far as I recall, and we're still well on track to hit the $300B exports level for the full fiscal, with exports at $180B in the first 7 months. Plus, the holiday season is coming up. with the Rupee weaker than it was in summer.

As far as reforms go, UPA-II clearly hasn't implemented anything even close to what it was capable of accomplishing considering the mandate they came into power with. Perhaps it is better that way. India never has been a top down economy like China. If the continued worldwide uncertainity and lame duck reform process still gives us 7%, we've a pretty resilient economy alright.

chaanakya · Post by **chaanakya** » 10 Nov 2011 10:27

Theo_Fidel wrote:
I was a Kelambhakkam near Mahabalipuram and there is an entire city that has popped up. Looks like about $2-3 Billion worth of investment. You will be hearing about Kelambhakkam in the same breath as Sriperumbudur shortly. .

Are you talking about SwarnaBhumi project- Township under construction by MARG ?

There is another project to four-laning of ECR as well and extend it to KanyaKumari. That might take some load off GST.

Tamilnadu has indeed spent a lot of money on infrastructure: good quality as well. Power situation is not satisfactory though.

Theo_Fidel · Post by **Theo_Fidel** » 10 Nov 2011 10:52

Swarnabhumi hasn't really started construction has it. There is a hoard near the Airport about construction starting in 2010.

In any case that is nearer Pondicherry.

This is near the Hindustan College of Engineering where I went to visit an old Professor friend of mine. There was a Chettinad Hospital and whole bunch of Km after Km of buildings, apartments, etc to the south. Looked like a small city of 300,000 came up over night. Construction is ongoing. It been a few years since I drove through there, at least 2005 I think, still it is staggering. To the North the scale of Siruseri is simply astounding. Even Massaland would be impressed by that scale.

Need to explore more.

I'm almost tempted to do a full R2I on the spot, rather than the 183 day shuttle as present. If only India had more Earthquakes.

Aditya_V · Post by **Aditya_V** » 10 Nov 2011 10:58

Theo_Fidel wrote: This year it is still 7%. From what I see in Chennai it has got be much much higher growth rate.

In Chennai there is absolutely no sign of any slow down only. The place is absolutely booming and money flowing like no ones business. I was a Kelambhakkam near Mahabalipuram and there is an entire city that has popped up. Looks like about $2-3 Billion worth of investment. You will be hearing about Kelambhakkam in the same breath as Sriperumbudur shortly.

Even at 7% growth rate a $2 Trillion economy is adding about $150 Billion to itself every year. Assuming a tax rate of 25%, about $40 Billion+ will be rolling into GOI coffers additional every year. This unfortunately means the GOI can afford these cash extravaganzas and in a couple of years it will become a rounding error. Yindian growing wealth is 'enabling' UPA addiction to cash melas.

Only good thing is GOI appears to finally be spending some serious cash on infrastructure.

have you Been to Chennai after the rains? Infrastructure is in the Coovum. Kelambakkam- OMR investments were done a few years back and what you are seeing is result of investments made by Private enterprises a few years back.

Try getting a job in Chennai, you will relise there are very jobs in the above 10 lac bracket and excess manpower supply. Similair qualified person can get a much better paying Job in Bengaluru, Mumbai or Delhi.

Chennai is creaking, while OMR, Mahindra city etc is booming, since IT exports are pretty good with Cognizant, TCS etc doing pretty well, the manufacturing/Industry and Service sector depending on the domestic market is struggling

Pratyush · Post by **Pratyush** » 10 Nov 2011 14:52

Suraj Ji,

What if the export growth was not really export growth. I know a paanwala close to some one in Director General Foreign Trade and he said that April-June export revenues actually contained a huge amount of Black money which was being being repatriated to India. Additionally, the same was the case with the July-Sept qtr as well.

A decline in export numbers is therefore in line with what was predicted by him.

Nihat · Post by **Nihat** » 10 Nov 2011 16:34

If the system of implementation of social spending were to improve in subsequent years i.e. based on UID and direct bank transfers thereby cutting out the middlemen and significantly reducing scope for corruption, then aren't Social spending schemes like NREGS and FSB useful for the future. After all they do boost rural spending and that money eventually does go back in the economy.

To meThe implementation appears to fuel inflation rather than the concept itself.

vina · Post by **vina** » 10 Nov 2011 16:47

To meThe implementation appears to fuel inflation rather than the concept itself.

Well, if printing money can create wealth and prosperity, everyone would do it. What is needed is productivity growth and investment capital. What the NREGA can do if done properly is increase social investments and capital . If it is a consumption dole, it will only increase in inflation.

gakakkad · Post by **gakakkad** » 10 Nov 2011 19:27

Nihat wrote:If the system of implementation of social spending were to improve in subsequent years i.e. based on UID and direct bank transfers thereby cutting out the middlemen and significantly reducing scope for corruption, then aren't Social spending schemes like NREGS and FSB useful for the future. After all they do boost rural spending and that money eventually does go back in the economy.

To meThe implementation appears to fuel inflation rather than the concept itself.

NREGA and FSB are the most bullcrap concoctions of a shitty socialist mind... If I run the country , I want to empower people to create wealth , and not make them dependant on the government for their roti , kapda and zopdi. What wealth is created by NREGA ? None , it is destroyed. NREGA prevents urbanization , makes people lazy and prevents them for working at productive industries... The scheme was intended to legalize bribing voters..Nothing different from doling out cash during elections ..

The FSB , however altruistic it may sound is a diabolical scheme.. Once it is implemented , it ll be impossible to repeal.. The NAC wants to prevent food from being exported.. And they are against modernization of agriculture.. What their intention is by this scheme is to drive India 2 decades backward.. They intend to keep just 2 issues in Indian politics .. NREGA and fsb.. So election promises will look like " I ll double your NREGA salary.. " ...Or I ll reduce the cost of rice to Rs 2 / kg)... Superficially this may sound altruistic.. But everyone knows that it is unsustainable...It some sensible opposition guy opposes this scheme , media will brand him evil... and will market him to be the guy who prevents cheap rice from being sold...the system is sure to collapse..

In 20 billion they spend on NREGA every year, one could install 20k MW worth of electricity production capacity , or build 1000s of Km of highway , or modern sewage treatment plants ond water purification plants for several cities... or create 20 iit level insti's ..20 billion is the research funds of top 40 US universities combined for science discipline... (MIT spends 760 million on research every year)... or create 40 tertiary care hospitals with attached medical colleges...or etc etc etc...The is what social sector investment is all about...This is how jobs are created...this is how a nation is built...

Theo_Fidel · Post by **Theo_Fidel** » 10 Nov 2011 19:44

G,

Not only that, neither NREGA or FSB reaches the very bottom of Destitute India, for the simple reason that those people do not own land and are not officially recorded. These schemes have the effect of making them even poorer. So it is a wealth transfer from the destitute to the slightly better off.

Aditya,

Where in India are 10 lakh type jobs plentiful. Truly IT/Vity has warped peoples sense of entitlement. Even massaland is struggling to create such jobs. You want 10 lakhs in India better be prepared to work 20 hour days and have 3-4 different jobs and investments going. There are never going to be 9-5 jobs that pay so much when the country remains so poor. For people looking for jobs in the 1 lakh range, jobs are plentiful. I was talking to some students in HCE and all of them are placed at small/medium engineering companies by 3rd year at 1 lakh type starting jobs. They are grateful for it as well.

Suraj · Post by **Suraj** » 11 Nov 2011 02:31

Pratyush wrote:Suraj Ji,

What if the export growth was not really export growth. I know a paanwala close to some one in Director General Foreign Trade and he said that April-June export revenues actually contained a huge amount of Black money which was being being repatriated to India. Additionally, the same was the case with the July-Sept qtr as well.

A decline in export numbers is therefore in line with what was predicted by him.

You make it sound like export/import invoicing issues are a startling new revelation. It is not. It has been going on forever. Depending on the macroeconomic circumstances, the situation is either overinvoicing exports (money flowing in) or imports (money flowing out). The same applies in the case of PRC too, among other countries. I heard no teeth gnashing here back in the days when imports were boosted by overinvoicing tamasha leading to money flowing out. There's nothing startling going on here.

paramu · Post by **paramu** » 11 Nov 2011 02:34

Theo_Fidel wrote:If only India had more Earthquakes.

Why? Are you in the business of making a killing through relief works?

Aditya_V · Post by **Aditya_V** » 11 Nov 2011 12:30

Theo_Fidel wrote:G,

Aditya,

Where in India are 10 lakh type jobs plentiful. Truly IT/Vity has warped peoples sense of entitlement. Even massaland is struggling to create such jobs. You want 10 lakhs in India better be prepared to work 20 hour days and have 3-4 different jobs and investments going. There are never going to be 9-5 jobs that pay so much when the country remains so poor. For people looking for jobs in the 1 lakh range, jobs are plentiful. I was talking to some students in HCE and all of them are placed at small/medium engineering companies by 3rd year at 1 lakh type starting jobs. They are grateful for it as well.

Saar I am talking CTC 10 Lac Per Annum, Not per month. Jobs in the 1 lac range per month are also tough in Chennai.

This is real news to me, paying so much to freshers in small/medium engineering companies. I think there is some exaggeration going on there.

Theo_Fidel · Post by **Theo_Fidel** » 11 Nov 2011 12:32

I'm talking per annum as well.

Yes people do live on 1 lakh per annum. Take a look at what that is relative to our average per capita.

700 fresh engineers were hired by the Chennai metro. Their average pay was about Rs12,000-Rs15,000 per month. These are the types busting their A$$ out in the hot sun, running 12 hour days, building India. Careful what you say/think about them.

Aditya_V · Post by **Aditya_V** » 11 Nov 2011 12:49

Theo_Fidel wrote:I'm talking per annum as well. Yes people do live on 1 lakh per annum. Take a look at what that is relative to our average per capita.

Ok sorry for the misunderstanding, Yes 1 per annum meant a lot to me some time ago, with a huge EMI outgo, it a constraint. Fresh out of college my first salary/ stipend was 2K per month and was more than adequate. So 10K to a graduate is still good money.

But still compared to Bengaluru, Mumbai or Delhi, high paying jobs are relatively smaller in Chennai. The main issue being House purchase, since rents and Reality prices have hit sky high prices.

Funny thing is auto drivers whom I have spoken to state that they will not go home with Rs.600 at home, a guy claimed he quit his job since he was making less money than being an auto driver. every call taxi driver I talk to states he make 12-13K per month.

If he owns the Taxi he makes much more.

manish · Post by **manish** » 11 Nov 2011 15:25

Theo_Fidel wrote:Swarnabhumi hasn't really started construction has it. There is a hoard near the Airport about construction starting in 2010. In any case that is nearer Pondicherry.

This is near the Hindustan College of Engineering where I went to visit an old Professor friend of mine. There was a Chettinad Hospital and whole bunch of Km after Km of buildings, apartments, etc to the south. Looked like a small city of 300,000 came up over night. Construction is ongoing. It been a few years since I drove through there, at least 2005 I think, still it is staggering. To the North the scale of Siruseri is simply astounding. Even Massaland would be impressed by that scale.

Need to explore more.

I'm almost tempted to do a full R2I on the spot, rather than the 183 day shuttle as present. If only India had more Earthquakes.

Parts of it are already operational Theo saar, see below:
Virgo Eng sets up valve making plant in Chennai

BS Reporter / Chennai November 8, 2011, 0:37 IST
Pune-based valve manufacturing firm Virgo Engineers Group has set up its new manufacturing facility near Chennai with an investment of around Rs 30 crore. The company is planning to set up a foundry in Coimbatore to address its internal requirements with another around Rs 30 crore.

The new facility on around 120,000 sft in Marg Swarnabhoomi near here, is expected to generate a revenue of Rs 20 crore in the first six months of operations, by the end of current fiscal.

Apart from Virgo, Danish pump manufacturer Grundfos, Vanspall, facility for manufacturing cooling tower equipment and an auto component manufacturing facility by Polyhose operate in Marg Swarnabhoomi, according to GRK Reddy, chairman and managing director, Marg Group.

gakakkad · Post by **gakakkad** » 11 Nov 2011 18:28

@ Theo ..

completely agreed.. My internship postings in a phc a few years ago proved to be a valuable lesson in electoral politicals and political economy.. NREGA and FSB are vote gathering of the worst kind.. The health schemes of central government are purposefully designed to fail... The people reponsible for village health are rural health assistant and anganwadi and ASHA workers..The important thing here is that they are selected amongst the politically influential people of the village.. So the votes of village depends on how happy these people are..As a result vaccines in PHC are oversupplied .. (Often 3-4 times the requirement).. these health workers sell the excess vaccines and drugs to urban medial stores and make in decent profit.. There is something called Janani suraksha yojana in which incentive of 700 rupee iirc is given to the patient to get their deliveries done in PHC.. pretty decent method of corruption.. i estimate that per village 2-3 lakh inr will be swindled by these health assistants..And in return they ll mislead the village to vote for a particular party... Such schemes usually come from the UPA.. UPA-1 framed something called the NHRM .. A disastrous scheme of the NREGA type..

Typically village elders and sarpanches have a lot of influence in electoral politics of the village.. I believe that they have huge financial interests in the NREGA .. They must be colluding with officers incharge of money distribution and must be pocketing the money with tacit approval of the UPA for exchange of votes..

YSR was popular in Andhra in spite of being corrupt and inefficient at governance because he had huge support of the government workers and the school teachers.. School teachers are often given election duties...

This is the same reason why poverty in India is over-estimated... The more poverty you show in the region the more funds you get..

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w.r.t the salary of engineers ..its a very pathetic situation.. I feel quite angry when media uses the phrases like "selfish consumerist middil class , working in AC office , not understanding the pain poor bla..bla..bla..)

Not only is the prosperity of middle class greatly over-stated , the poverty of the rural farmers too is greatly over-stated.. An American engineer lives a far better life and owns better appliances than his Indian counterpart on an average.. But the Indian labourer is actually better of than his more productive , less trade unionist american counterpart...

Pay:productivity ration is actually lower in the engineer than a farmer.. I mean to say that a farmer makes more money than an engineer when we compare it to the productivity...

I remember several years ago dads hospital was under construction..We were lucky to have a particularly diligent engineer at the site.. In those days (2003 iirc) the contractor paid him only 10k inr .. the guy worked for 10-14 hours..

The labourers were lazy slobs.. They had a break every hour or so and littered the place with bidis...they even drank frequently... I often found the engineer and the foreman doing more physical work than the labourers.. To meet deadlines the contractor had to put in twice the number of labourer raising the construction costs..the labourers were thankless bunch of people..dad often brought them food or medicines ..but they worked badly...

And our media blames the "fascist middil class " for all the troubles ranging from inflation to corruption..

Even more bull crap is "state spending lakhs per student" on IITs and medical colleges and them moving abroad.. someday I ll explain that the state spends barely a footi kaudi on student education in medical or engineering colleges...

...............................................................................................................................

more airline companies need a bailout...effects of the UPA mis-governance beginning to show.....Wish they don't ever come back...

I can safely say t

Theo_Fidel · Post by **Theo_Fidel** » 11 Nov 2011 20:50

Aditya_V wrote:But still compared to Bengaluru, Mumbai or Delhi, high paying jobs are relatively smaller in Chennai.

This is definitely true. Skilled Manpower availability is very high in Chennai and people are relatively flexible keeping wages relatively low. I met a 4 year IT graduate who is now a full time Welding supervisor!! Compared to Bangalore housing is cheaper and Chennai has been a large city for much much longer so has a lot of family owned homes the young folk can crash in.

It is this skilled labor lower cost pool that is bringing in companies by the droves for manufacturing type jobs. It is not unusual to see companies advertise for 1000+ positions, most of those hired will be fresh engineering grads. Like I said Chennai is booming at this level.

G. I don't think it is pathetic at all. This is how nations get built. I was reading a book on Nuclear Reactor research in the ORNL in the 1950's. This was a time of great research and over 150 different reactor types were built and extraordinary advance made. Over 5,000 engineers were involved. Average pay adjusted for inflation for fresh engineers, as most were, was in the $15,000 range. They could build and test a new 20MW reactor design for the equivalent of $10 million.

They had all the safety bells and whistles too. Insurance was cheaper. USA can not do this today. Skill is too expensive.

We have it and should exploit it to the hilt.

Singha · Post by **Singha** » 12 Nov 2011 08:34

is the area you surveyed the parallel road to ECR from siruseri down to mamallapuram? during recent trip we didnt take the turn to ECR by mistake and landed on this parallel road. as it was also going to our destination we kept on going. vast number of offices and highrise flats seem to be coming up....one green wooded ring road type thing from vandalur zoo to ECR also had lot of upcoming stuff...could see a swank building of VIT also (vellore instt of tech).

Theo_Fidel · Post by **Theo_Fidel** » 12 Nov 2011 10:35

I went from Vandalur side but yes, the N-S road is old Mahabalipuram road. There was enormous amount of construction on Vandalur road itself. This was wide open fields 5 years ago.

uskumar · Post by **uskumar** » 12 Nov 2011 10:49

Yes, That is Rajiv Gandhi Road/Old Mahabalipuram Road/ IT Highway. Lots of IT offices there. used to travel to up and down that road daily for 5 year when our IT firm used to be located there. I agree that 10L PA jobs in Chennai is relatively less compared to Bangalore(or even Hyd or Gurgaon) but lot of jobs in 3 to 6L PA bracket. I think the reason is there is very few product based IT firms in chennai.

vina · Post by **vina** » 12 Nov 2011 19:21

Compared to Bangalore housing is cheaper and Chennai has been a large city for much much longer so has a lot of family owned homes the young folk can crash in

No way! Housing in Chennai sucks and sucks really really hard. The quality of housing stock is extremely poor, the city is in total shambles, and for similar money you get much better housing with lot more facilities in bangalore. Chennai rents are higher than bangalore, and land values are far higher than the BLR equivalent.

I know people who got moved to Chennai (kicking and fighting against it I assure you) and their companies had to pay 3 times what they were paying in BLR for comparable acco (this is RA Puram /Adayar/Besant Nagar/South Chennai .. other areas of Chennai are barely liveable, barring say Anna Nagar and certain other places) .

Yes, if you are willing to put up with substandard acco and poor housing, other stuff in Chennai is cheaper than in Bangalore by a fair bit.

arun · Post by **arun** » 12 Nov 2011 22:54

X Posted from the India-China News and Discussion thread.

Michael Schuman writing in TIME puts his money on India rather than on P.R.China:

The Case for India: Free to Succeed

By Michael Schuman Thursday, Nov. 10, 2011

If I have to endure another corporate executive blindly praising China and reflexively trashing India, I might actually gag. …………………………………….

So don't be fooled by Shanghai skyscrapers and Beijing propaganda, or misled by the chaos of Mumbai's streets and India's tendency for self-deprecation. China's state may give it an edge today. But India's private economy will give it the edge tomorrow.

Read more: TIME

krishnan · Post by **krishnan** » 12 Nov 2011 23:24

Interesting! The page is gone..

Rahul M · Post by **Rahul M** » 13 Nov 2011 00:09

it's here http://www.time.com/time/specials/packa ... 76,00.html

Asit P · Post by **Asit P** » 13 Nov 2011 04:54

Citigroup feels that by 2050, India will become world's largest economy
http://economictimes.indiatimes.com/opi ... 699821.cms

According to a study by US banking group Citi, India will be the world's largest economy within 39 years. Indian GDP in 2050, measured by purchasing power parity (PPP), will be $85.97 trillion. China, in second place, will have a GDP of $ 80.02 trillion and the US $ 39.07 trillion

Interesting study. The earlier studies used to say that by 2050, India shall be world's 3rd largest economy!

neel · Post by **neel** » 13 Nov 2011 08:55

Asit P wrote:Citigroup feels that by 2050, India will become world's largest economy
http://economictimes.indiatimes.com/opi ... 699821.cms
According to a study by US banking group Citi, India will be the world's largest economy within 39 years. Indian GDP in 2050, measured by purchasing power parity (PPP), will be $85.97 trillion. China, in second place, will have a GDP of $ 80.02 trillion and the US $ 39.07 trillion
Interesting study. The earlier studies used to say that by 2050, India shall be world's 3rd largest economy!

The article does not seem to link to the study, which can be found here.

One thing to note is that the numbers in this report are all calculated in 2010$. With a population of 1.65 billion in 2050, that translates into 2010$52,100 per capita. By comparison, the current GDP per capita in the US is $48,900. So, the report is projecting that the real level of per capita output in India in 2050 will exceed that of the US today.

Abhijeet · Post by **Abhijeet** » 13 Nov 2011 09:44

The projections are PPP not nominal.

Hitesh · Post by **Hitesh** » 13 Nov 2011 10:47

That will only happen if India discovers unlimited energy and unlimited supplies. Otherwise fugghettiabaddit.

svinayak · Post by **svinayak** » 14 Nov 2011 01:02

Asit P wrote:Citigroup feels that by 2050, India will become world's largest economy
http://economictimes.indiatimes.com/opi ... 699821.cms
According to a study by US banking group Citi, India will be the world's largest economy within 39 years. Indian GDP in 2050, measured by purchasing power parity (PPP), will be $85.97 trillion. China, in second place, will have a GDP of $ 80.02 trillion and the US $ 39.07 trillion
Interesting study. The earlier studies used to say that by 2050, India shall be world's 3rd largest economy!

Projections more than 10 years to future is not really considered real. Global trading system and geo political system will have many shocks which will change the projections

Harish · Post by **Harish** » 14 Nov 2011 08:21

The NYT used to be a bastion of anti-Indianism and anti-Hinduism; the WSJ is usually much more even-handed in its reports on India. However the NYT may finally be changing its stripes - in its India Ink blog section, the paper keeps an eye out on India - so far, positive. Tom Friedman is doing a good work, as usual, keeping India sharply in focus for all the right reasons.

November 12, 2011

November 12, 2011
OP-ED COLUMNIST
The Last Person
By THOMAS L. FRIEDMAN
Jodhpur, India
http://www.nytimes.com/2011/11/13/opini ... erson.html
http://www.nytimes.com/2011/11/13/opini ... nted=print

THERE is a concept in telecommunications called “the last mile,” that part of any phone system that is the most difficult to connect — the part that goes from the main lines into people’s homes. Prem Kalra, the director of the new Indian Institute of Technology in Rajasthan, one of the elite M.I.T.’s of India, has dedicated his school to overcoming a different challenge: connecting “the last person.”

“How will we reach the last person?” Kalra asked me during a visit to his campus here in Jodhpur in the Thar Desert of western India. The “last person” in his view is the poorest person in India. And the question consuming Kalra is can “the financially worst-off person” in India “be empowered” — be given the basic tools to acquire enough skills to overcome dire poverty.
In a country where 75 percent of the people live on less than $2 a day, that’s a big question. It is why, one year ago, India’s Human Resources Development Ministry put out a very specific proposal that Kalra and his technology institute decided to take up, when no one else would: Could someone design and make a stripped-down iPad-like, Internet-enabled, wirelessly connected tablet that the poorest Indian family, saving about $2.50 a month for a year, could afford if the government subsidized the rest? Specifically, could they make a simple tablet usable for distance learning, teaching English and math or just tracking commodity prices for under $50, including the manufacturer’s profit?

The answer was yes. Last month, Kalra’s team — led by two I.I.T. Rajasthan electrical engineering professors, one of whom comes from a village that still has no electricity — unveiled the Aakash tablet. Aakash is Hindi for sky. It’s based on the Android 2.2 operating system, with a 7-inch touch screen, three hours of battery life and the ability to download YouTube videos, PDFs and educational software like Virtual Labs. The government will subsidize the wireless connections for students.

If Indians could only purchase tablets made in the West, the price points would be so high they’d never spread here, said Kalra, so “we had to break the price point” in a big way. They did it by taking full advantage of today’s hyperconnected world: pulling commodity parts mainly from China and South Korea, using open-source software and collaboration tools and employing the design/manufacturing/assembly abilities of two companies in the West — DataWind and Conexant Systems — and Quad in India.

The Aakash is a ray of hope that India can leverage technology to get more of its 220 million students enough tools to escape poverty and poor teaching, but it’s also a challenge to the West.

In terms of hope, I was struck by a story that Kalra’s wife, Urmila, told about a chat she had had with their maid after the Aakash was unveiled on Oct. 5. As Urmila recalled, her maid, who has two young children, said that she had heard “from the night watchman that Mr. Kalra has made a computer that is very cheap, and is so cheap that even she can afford to buy it. The watchman had given her a picture from the paper, and she asked me if it was true.”
Urmila told her it was true and that the machine was meant for people who could not afford a big computer. Added Urmila: “She asked, ‘How much will it cost?’ I said, ‘It will cost you around 1,500 rupees.’ [$30.] She said: ‘15,000 or 1,500?’ I said, ‘1,500.’ She was sure that if the government was doing something so good for the poor, it had to have a catch. ‘What can you do on it?’ she asked me. I said, ‘If your daughter goes to school, she can use it to download videos of class lessons,’ just like she had seen my son download physics lectures every week from M.I.T.’s [OpenCourseWare]. I said, ‘You have seen our son sitting at the computer listening to a teacher who is speaking. That teacher is actually in America.’ She just kept getting wider- and wider-eyed. Then she asked me will her kids be able to learn English on it. I said, ‘Yes, they will definitely be able to learn English,’ which is the passport for upward mobility here. I said, ‘It will be so cheap you will be able to buy one for your son and one for your daughter!’ ”

That conversation is the sound of history changing.

And not just for India. We’re at the start of a nonlinear move in innovation thanks to the hyperconnecting of the world — through social media, mobile/wireless devices and cloud computing — which is putting cheap innovation devices into the hands of so many more people, enabling them to collaborate on invention is so many new ways. This Great Inflection will be an opportunity and a challenge for every worker and company because we’re going to see more and more product “price points” broken in big ways.

And that explains why Kalra tells recruiters for major companies to stay away from his campus. He wants his Indian students to think about inventing their first jobs, not applying for them. “I want them to start companies and become C.E.O.’s of their own. It is the only way we can catch China,” he says. India can’t wait for the world to solve India’s problems at India’s price points. It has to invent them. It now has tools to do so. This is about to get interesting.

neel · Post by **neel** » 14 Nov 2011 10:07

Hitesh wrote:That will only happen if India discovers unlimited energy and unlimited supplies. Otherwise fugghettiabaddit.

Once upon a time, there wasn't the technology for unlimited energy at any price. This is no longer the case. There is already the technology for unlimited energy; it's only a matter of price. As long as we have a price system, we can allocate scarce resources, so as electricity from cheap sources grows increasingly scarce by construction as it is used in higher quantities, the price increases from the current $0.12/kWh, which is above the price point of coal (the current cheapest, so long as the full environmental and health impacts from emissions remain externalities), until it reaches US$0.18/kWh for electricity, at which you can have unlimited solar thermal electricity. The increased price does represent a real shift in the supply curve of all energy intense products, but since, as you move up the value chain, the average energy intensity of output declines, it is not a constraint to productivity growth that is increasingly in the form of labour productivity growth due to human capital formation and total factor productivity growth from business model innovation (which is, in part, one of the soft returns to human capital formation).

In fact, the largest shift in energy intense GDP growth is the move from the unproductive agricultural sector to the industrial/commercial sector wherein productivity is 10x higher. As 40% of the population increases their productivity at current levels of energy intensity to the levels of the other 60%, we will see a move from (60%*1+40%*0.1=)64 units to 100 units, which is a 56% increase in energy use. Beyond that, energy efficiency, labour productivity increases, and total factor productivity increases give us the rest of the gains (i.e. per capita GDP goes from $3500->$5500 through urbanization, which is the growth that requires heavily increasing energy supplies, while the remaining factor of 10 only requires a factor of 3-4 in energy increase, but in a way that is not so severely constrained by the price of that energy as to be impossible with a 50% price increase, which itself assumes away any further technological advances in solar power in the next 40 years).

gakakkad · Post by **gakakkad** » 14 Nov 2011 17:38

Hitesh wrote:That will only happen if India discovers unlimited energy and unlimited supplies. Otherwise fugghettiabaddit.

It is not about unlimited energy.. It is about how efficiently we manage the existing resources.. As far as nominal GDP is concerned at the current nominal growth rate (15 %) India will surpass khanate in 2 decades..

India's GDP was 1 trillion in 08..In 11-12 it is about 2 trillion..In a span of 4 years it has doubled.. At the projected CAGR (14-20%)our nominal GDP will be 10-16 times the current level by 2032 .

The article using ppp to project growth is nonsense.. PPP cannot and should not be used to project growth.. Even the founders of the concept say so..

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@ Theo.. The reason why the situation is pathetic is not just because of the salary.. We are growing at 8-10 % real growth rate ..That simply is not enough..We are in our demographic dividend phase.. And this is not going to last forever.. India will have an ageing population by 2045... We have to get rich by then.. The current government policies are tantamount to crime against humanity ... They say that 7-8 % growth in spite of the global scenario bla..bla..bla.. The fact is that we are growing at the present rate simply because we have a young population..And not due to the "Underlying strength of the economy" or any other such hifalutin reason..And that rate simply is not enough..