Indian Economy News & Discussion - Nov 27 2017

[Suraj]

Can't compare the two. Army chiefs become chiefs at the fag end of their career, and then retire before slipping into oblivion (for the most part). Rajan is still in the prime of his professional life, and he is a professor. Expecting him to not talk or pontificate is an exercise in futility.

Agreed he needs to maintain professional discretion here, which includes not talking about sensitive matters he learnt in his professional capacity, and not speculating on matters related to the RBI.

They are absolutely comparable. It has nothing to do with the person's age or point of life. They serve at the pleasure of the Government of India. They themselves are insignificant, and derive all their 'face' from the power and prestige of the institution they serve. Maintaining decorum in order to maintain the power of institutions is far more important than any personal concern of theirs. The institutions are the foundation of our power, not these people themselves.

No high ranking public servant, particularly one appointed to a post entirely on the goodwill of the political leadership, has any business chasing microphones after his tenure. The man should go away, teach classes or write authoritatively researched papers, if he so cares about DeMo. But definitely not barking into camera mics. How many professors do that ? And what makes you think he's speaking in the capacity of a professor ? He's speaking as ex-RBI Governor. These are not people who are expected to behave like this. Every time he opens his mouth, he confirms his lack of maturity and proves GoI was right to politely decline him an extension. It is irrelevant whether he supports or opposes DeMo. He has no business chasing the camera in the first place.

[Austin]

Deleted

[yensoy]

...He has no business chasing the camera in the first place.

In Davos, the camera chases you.

Anyway all the anti-demo sentiment and messaging will evaporate in a year. Demo is fait accompli, "what could have been" is meaningless now. Best is to ignore comments, take whatever positive message or criticism there is, and move forward.

[Suraj]

In Davos, the camera chases you.

Anyway all the anti-demo sentiment and messaging will evaporate in a year. Demo is fait accompli, "what could have been" is meaningless now. Best is to ignore comments, take whatever positive message or criticism there is, and move forward.

You're still missing my point. This is not about DeMo or Davos. He might as well be talking about the latest bollywood starlet and it's still wrong. This is about our own institutions. Rajan is not an individual with free will in this context. He derives all his importance from the institution he once represented, and which he now fails to represent with sufficient honour and integrity, with his behavior.

We don't get strong as a country unless we safeguard its institutions. People who run it will come and go, but each of them has a duty to behave him/herself properly. Do other ex RBI govs keep showing up on TV ? At Davos ? Or anywhere else ? It's not the business of an ex-RBI governor to behave like a cheap publicity hound.

[yensoy]

^^^^ Rajan is a superstar (whether you like it or not), has been one since before RBI. The media will seek him out, especially a media with a known slant such as that represented by Prannoy Roy. Rajan did not reveal any state secret, he had an opinion which he voiced and he said that the consequences of demo are still waiting for data to be analyzed. The fact that he didn't support demo is not a state secret.

{Deleted}

[Suraj]

It's clear we don't see eye to eye here and that you care more about an individual than a state institution, so we will have to agree to disagree and move on. I've cleaned up the gratuitous personal attack in your post.

[Yagnasri]

So it is realistic for us to accept the erosion of the institutional strength by people whose is after their 15 minutes fame?. No one really knows about him before he became RBI Gov. That is a fact. He was some insignificant babu type fellow with fancy khanland profile. That is all. He did nothing great as Gov of RBI. MSM can make him a superstar in the eyes of anti-national media. It does not mean he has done any great contribution to the nation or has any great achievement other than becoming RBI Gov at the merch of UPA.

[csaurabh]

I do not understand what Modiji is saying about protectionism being dangerous. Indian industries need to be protected, that's a fact. This is even more true when it comes to military industrial complex such as development of LCA Tejas , etc.

Combined with allowing 100% FDI in single brand, the govt has totally lost the narrative of Swadeshi and seems to be sold out to Western MNCs..

[putnanja]

I do not understand what Modiji is saying about protectionism being dangerous. Indian industries need to be protected, that's a fact. This is even more true when it comes to military industrial complex such as development of LCA Tejas , etc.

Combined with allowing 100% FDI in single brand, the govt has totally lost the narrative of Swadeshi and seems to be sold out to Western MNCs..

100% FDI has been around from UPA times, what Modi did was put it on automatic approval list, and also gave them some time to localize content.

When banks are reeling under NPAs from loans given during UPA times and becoming cautious to lend now, and when many Indian companies are reeling under debt and are not in a position to invest and expand more, how will you get more companies to invest and grow jobs? If companies don't increase capital expenditure, where will jobs come from? If there are no jobs , then who will spend and increase growth?

FDI is much better than importing fully built cheap chinese products . Let more companies come in and invest, and only then can it create more jobs and grow the economy.

[yensoy]

It's clear we don't see eye to eye here and that you care more about an individual than a state institution, so we will have to agree to disagree and move on. I've cleaned up the gratuitous personal attack in your post.

The intention was only to ask to back up claim with evidence, sorry if you thought it was a personal attack. I do care about the institution but don't see how it was compromised by that short interview. Anyway thanks for doing your bit as mod...

So it is realistic for us to accept the erosion of the institutional strength by people whose is after their 15 minutes fame?. No one really knows about him before he became RBI Gov. That is a fact. He was some insignificant babu type fellow with fancy khanland profile...

Sorry sir you are completely wrong. He is a full professor in a highly respected school, and in particular his 2005 paper on financial risk predicted the financial crisis of 2008/9 https://thebankwatch.com/2012/08/30/has ... kson-hole/. He was ridiculed by the high priests of financial alchemy at that time, yet didn't hesitate to take them on.

Now I was on a blog before this time and many of us on that blog had also predicted such an outcome, but that was based on gut instinct rather than any scientific methodology. I have to give RRR full marks for bringing this up in an academic format at the Jackson Hole (is it required for economists to be skiers as well?) summit.

Anyway my point is that RRR is not a fly-by-night operator. We may disagree with him, he may disagree with demo, but let's give each other the respect and move on.

BTW, it also doesn't mean RRR is irreplaceable. Urjit Patel has been doing a steady job at RBI and someone like Viral Acharya shows the pipeline of young talent is still strong.

[Supratik]

Yensoy, Suraj is right. You may be a rockstar with five nobel prizes and professorships in ten MITs but none of the previous governors have been chatter boxes giving out useless sound bytes. The man is full of himself like Tharoor.

Pankaj, Gujrat was never first as FDI destination. Gujrat investment is mainly domestic. Get your facts right.

[Aditya_V]

The problem with RRR was there was clearly an NPA mess by the time he took over and he choose to keep quiet for 3 years. If he was honest he would have talked publically about it within 3 months of taking over.

[Gus]

Surajuddin, I am going to borrow your example to spread on twitter.

[vijayk]

The problem with RRR was there was clearly an NPA mess by the time he took over and he choose to keep quiet for 3 years. If he was honest he would have talked publically about it within 3 months of taking over.

He was protecting Karti from 2014. That is why he wanted to continue because of his loyalty to Chidamabarams.

He talked about it lightly but did not want to hurt Sonia and PC. When your job is not protecting interests of India but ruling clique, how can we trust this man?

[Gagan]

Rajan was a political appointee, and was being groomed for greater things by a political party.
His quotes, the media limelight being given to him still, are to be seen through that lens

[Suraj]

The intention was only to ask to back up claim with evidence, sorry if you thought it was a personal attack. I do care about the institution but don't see how it was compromised by that short interview. Anyway thanks for doing your bit as mod...

You're this close to a ban for repeating the attack. The next time you shove your foot in your mouth demanding of posters "what are you going to do about it, huh ?" that's going to be the end result. Nothing further on the matter.

Sorry sir you are completely wrong. He is a full professor in a highly respected school, and in particular his 2005 paper on financial risk predicted the financial crisis of 2008/9 https://thebankwatch.com/2012/08/30/has ... kson-hole/. He was ridiculed by the high priests of financial alchemy at that time, yet didn't hesitate to take them on.

I know of his background. None of that matters in the context of his behavior here. He speaks to every outlet today, not as the Jackson Hole speaker, but the former head of central bank of one of the most powerful economies on the planet. Also, someone who was unceremoniously removed from that position *and* his authoritarian actions as Governor resulted in GoI entirely modifying the rate setting mechanism to a decision by committee, taking away prior powers in the Governor's hands.

When one is a current or former public servant, one has a responsibility to behave a certain way. It's nothing to do with a written law. There's no written law that says one cannot swear at their parents and children in public, but who does that ? RBI governors are expected to behave a certain way when in office, and once they demit office. That applies to former service chiefs, head of RBI and any other major agency of the government.

Rajan is a textbook example of 'bad culture fit former hire' in his role as RBI governor. His stay was brief, he had the ignominy of publicly floating a trial balloon for his extension and being denied, his exit resulted in a wholesale change in how rates are set to eliminate the behavior he exercised while in charge, and his public behavior since, is contrary to any prior RBI governor. RBI responded to him the way an institution responds - by changing its framework to prevent the same behavior again. That's what mature institutions, like one of the world's most powerful central banks, do.

He's 54, presumably back to being a professor, and short of putting his head down and focusing on winning a Nobel Prize in Economics (which I would celebrate for a fellow Indian too), he's already past the zenith of career accomplishment. His attention seeking behavior may be 'understandable' to some, but it's unwelcome.

[Suraj]

Chinese media explains MBAs are not India's strength but weakness
I am disappointed by the lack of aspiration evidenced so far in the current governent to encourage the emergence of Indian multinationals and also in identifying areas of the future and strategically going after Indian leadership in those spaces.

It takes ~20-25 years to build something into an MNC sized entity. I'm sure there'll be responses of 'but something could be done NOW, not organically'. GoI has already done so too. Most notably, merging PSU banks. We don't need 25 different puny little state banks. 3-5 is plenty. China has the big four, all of which are huge by global standards too. Even the Reliance brothers' patchup has GoI's blessings, actions at that level don't happen in vacuum.

To create large entities, you need to create an environment where corporations can divest of bad performing entities and consolidate. Bankruptcy code lets companies move on instead of being stuck in litigation. The bank merger and recapitalization has major benefits, letting banks clear up balance sheet and accelerate credit growth again. There's a certain degree of unfairness in focusing lending to large corps, but that's already largely the case.

A lot of reform actions are not immediately visible, nor are they newspaper friendly. Let's take the example of the rise of Huawei. How did that happen ? Sure their govt backed it, but can anyone point out one major news article showing 'Beijing implemented so and so reform and Huawei grew big' ? No, it's a collection of measures implemented over a period of time. So please don't mistake the lack of major headline news for lack of reform measures. A lot of this is by nature dry unglamourous actions. Making it politically glamorous is a completely separate task to be done by those with the articulateness to do so, but it doesn't mean substantial reform ain't happening.

[vijayk]

This is true but technology is changing the entire world. we need a strategy on Blockchain,AI and we need to create our own multinationals in every sphere. Look at how Indians are so taken by Facebook, Twitter and {deleted}.

[Suresh S]

Suraj Your assessment of RR is spot on.it is not that hard to figure out either . But amazing that some people still do not get it.

[Mort Walker]

This is true but technology is changing the entire world. we need a strategy on Blockchain,AI and we need to create our own multinationals in every sphere. Look at how Indians are so taken by Facebook, Twitter and {deleted}.

Why the focus only on IT? To bring mass employment, there needs to be a large manufacturing base and a large food exporting base. India has Tata, the Reliance Group, and Mahindra which are major MNCs. In dairy processing there are companies like Amul that are also multi-billion dollar companies. Even a handful more of these types of companies would push India’s GDP ahead faster and bring mass employment.

[Mort Walker]

Suraj Your assessment of RR is spot on.it is not that hard to figure out either . But amazing that some people still do not get it.

If RR had brought down interest rates, some people would not care what he says. The RBI as of late did not bring down rates and now we’re back to a higher inflationary period due to the rise of oil prices.

[Rudradev]

Suraj,

I've taken the liberty of putting together a graphic illustration based on your example. Will tweet the same.

All, please share widely on WhatsApp, FB, other social media as well.

https://imgur.com/geKktCX

[Suraj]

Cool! Glad that example caught people's interest. I thought it was just boring math of interest to only a few.

[Yagnasri]

Rajan was involved with our economy in one capacity or another long before he became RBI Gov. Had we classified all the NPAs (which are not qualified to be classified under RBIs own guidelines) as he demanded and Banks resisted, it would have result chaos. Any person with schoolboy knowledge of banking knows that. So what is the logic behind such effort to force this matter? No logical answer other than that fact that his appointment is basically political in nature and he followed a scorched earth policy with the Banking sector which was already weak at that point due to reckless lending.This habit of forcing the banks to classify the accounts as NPA when they are not actual not NPA (and RBI in its audit also do not find anything wrong with them) he started still continues as bad things like that do not go away once inserted into any organisational culture.

This cheerleading to the rockstars created MSM is a major problem in our nation.

[sudarshan]

Suraj,

I've taken the liberty of putting together a graphic illustration based on your example. Will tweet the same.

All, please share widely on WhatsApp, FB, other social media as well.

https://imgur.com/geKktCX

Great, thanks. Will use it on some usual suspects.

[Dipanker]

Suraj,

I've taken the liberty of putting together a graphic illustration based on your example. Will tweet the same.

All, please share widely on WhatsApp, FB, other social media as well.

https://imgur.com/geKktCX

Aren't these medians and averages dependent on the numbers picked though? Meaning the numbers could be picked in such a way to prove different POV's.


Here are some examples. More can be generated by manipulating the numbers.

Base Case
Pop=11, Employment=100%, Median = 56, Average = 61.18
[33, 37, 46, 48, 53, 56, 63, 78, 81, 86, 92]

Now 2 people join in at lower end ( 25, 28), in this case both Median and the average income have gone down.
Pop=13, Employment=100%, Median = 53, Average = 55.84
[25, 28, 33, 37, 46, 48, 53, 56, 63, 78, 81, 86, 92]

This time 2 people join at the higher end (97,100), this time both Median and the Average income have gone up.
Pop=13, Employment=100%, Median = 63, Average = 66.92
[33, 37, 46, 48, 53, 56, 63, 78, 81, 86, 92, 97, 100]

Again 2 people join one at the Low end (13), one at the High End (102), median remains same but avergae goes down.
Pop=13, Employment=100%, Median = 56, Average = 60.61
[13, 33, 37, 46, 48, 53, 56, 63, 78, 81, 86, 92, 102]


Again 2 people join one at the Low end (23), one at the High End (112), median remains same but avergae goes up.
Pop=13, Employment=100%, Median = 56, Average = 62.15
[23, 33, 37, 46, 48, 53, 56, 63, 78, 81, 86, 92, 112]

[disha]

^Thats the point, there are lies, damned lies & statistics.

One cannot just scream that because median is falling more are pushed into abject poverty.

[Suraj]

Dipanker, you're wasting space here practicing basic math with random examples without understanding what the original example was about - recreating the circumstances of the particular dynamic change shown in the OECD data, and explaining what's going on there, and why their definition of median as something completely different, was nonsense. You're just saying 'ooh, they can move in different directions if I change different things!' Sure they can, and none of your examples relate to the OECD case.

Rudradev, if you want to make a minor tweak to your image, you can sum all the incomes in each year and represent that (roughly) as Gross National Income. The rest of your image is fine.

Since the original example doesn't seem understandable to some: it represents a dynamic economy that has significant change in annual employment count in excess of population growth, and far greater additions at the lower income end as new people get employed in new jobs, combined with gradual increase in pay for those currently employed. For median to increase in a given period, the net gain in jobs paying more than median income must exceed the net gain in jobs paying less than median. Assuming median pay is around or slightly more than average per capita income, that means on an annual basis, jobs paying more than ~$2200 (Rs.1.4-1.5 lakh) must exceed those paying less.

In our economic situation, we're rapidly adding people at the lower end, and they far outnumber those crossing above median income, which means the median will keep falling a little all the while, even as average per capita income, gross national income and aggregate wealth all rise rapidly. It's just a statistical movement. The mistake is in assigning some qualitative meaning to movement of median and pretending it means something ("poverty rate") it doesn't.

That's the problem with these indices. Many of them take statistical constructs that work in very narrow cases and attempt to apply them to all economies and give it fancy names. This use of median works fine if you have a stable population, stable employment, clustered income ranges, and moderate income growth across the board. Think Scandinavian social states. In that case, median shows a nice smooth rise too. It doesn't work right in our case. It doesn't even work in TSPs case, like I explained. You can have a stagnant economy, little employment gain, erosion in the value of currency, and you can get a net positive movement in median with zero/minimal positive movement in mean, and that magically becomes "TSP poverty rate is less than Indias!" despite half the GDP/GNI growth, more population growth and far fewer new jobs

In China case, their data shows they're no longer adding much at the lower end, and more movement is happening across the median, causing it to move up. We will get to that point, but first we need to broaden our employment base - we currently have a workforce population of ~500 million. China's is north of 700 million. The difference is significantly on account of the difference in shape of the population bulge - China has far greater working age population, while we have far more youth population. All those newcomers start at the lower end, and as the economic base matures, more people will move across the median than move into the lower half.

[Arjun]

Chinese media explains MBAs are not India's strength but weakness
I am disappointed by the lack of aspiration evidenced so far in the current governent to encourage the emergence of Indian multinationals and also in identifying areas of the future and strategically going after Indian leadership in those spaces.

It takes ~20-25 years to build something into an MNC sized entity. I'm sure there'll be responses of 'but something could be done NOW, not organically'. GoI has already done so too. Most notably, merging PSU banks. We don't need 25 different puny little state banks. 3-5 is plenty. China has the big four, all of which are huge by global standards too. Even the Reliance brothers' patchup has GoI's blessings, actions at that level don't happen in vacuum.

To create large entities, you need to create an environment where corporations can divest of bad performing entities and consolidate. Bankruptcy code lets companies move on instead of being stuck in litigation. The bank merger and recapitalization has major benefits, letting banks clear up balance sheet and accelerate credit growth again. There's a certain degree of unfairness in focusing lending to large corps, but that's already largely the case.

A lot of reform actions are not immediately visible, nor are they newspaper friendly. Let's take the example of the rise of Huawei. How did that happen ? Sure their govt backed it, but can anyone point out one major news article showing 'Beijing implemented so and so reform and Huawei grew big' ? No, it's a collection of measures implemented over a period of time. So please don't mistake the lack of major headline news for lack of reform measures. A lot of this is by nature dry unglamourous actions. Making it politically glamorous is a completely separate task to be done by those with the articulateness to do so, but it doesn't mean substantial reform ain't happening.

Here's my take on the China growth story...part of it is luck since it was surrounded by other East Asian countries that had developed economically prior to China starting its development. So - Japan, S Korea, Taiwan, HK acted as natural enablers where they invested in backend manufacturing operations in China since the cost arbitrage was huge about 3 - 4 decades back and also China was closest both physically and culturally. That kickstarted China's entry into low end manufacturing. China quickly progressed into electronics manufacturing given that these same countries that were setting up plants in China were also major electronics players themselves by that time.

Given the first mover advantage and the proximity to corporate customers in Japan / Taiwan / S Korea - China became the leader in electronics manufacturing. That then naturally segued into China becoming the leader in mobile / smart phones once that industry took off in the noughties.
So Huawei may have just been a byproduct of the Chinese dominance in electronics manufacturing - since some firm obviously had to be a winner.

Social media firms (Alibaba, Baidu, Tencent) took off big time in the noughties. A big reason was the lack of familiarity with English which meant that Google & Amazon could not capture that market. AND my understanding is that they were also kept out strategically from the Chinese market by far-sighted Chinese leaders.

The dominance of Chinese social media naturally then segued into Chinese dominance in AI today (AI development has been led by the social media firms in both the US and China). China has a clearly articulated ambition in AI (obviously nothing less than #1 which is what is a 'natural' position for China in any industry) and they have been systematically working towards it. Similarly - in every other industry of the future - whether Blockchain / cryptocurrency, biotech, nanotech, robotics - China has worked on a clear gameplan of being #1, end of story.

Unfortunately - while I am cognizant that India never had the advantages initially had (developed countries near to it that would be natural candidates for outsourcing manufacturing to India etc) - the fact is that India has still not developed a strategic culture with the singleminded focus on dominating the industries of the future.

The fact that AI is going to completely change the face of global industry has been evident for more than two years now - leave alone China, every other two-bit western nation has publicly articulated a policy of wanting to emerge as leader in the space. India's statements on the space have been confined to Gadkari saying that self-driving cars (which are obviously totally a byproduct of deep learning technologies) will never be allowed on Indian roads and some perfunctory statements from other Indian ministers that India will work on AI as long as it is relevant to Indian problems!!

Don't get me wrong...the alternative political parties in India's are Naxalites in sophisticated garb (referring to Congress & AAP) - and cowherds from the BJP are preferable to Naxals. But these cowherd types are still not what we want for looking into the future and coming out with a strategy to dominate the emerging industries.

This deeply anti-intellectual bias of the government seems not be a just a Congress claim, but very much a reality. Even in the space of Hindutva - I don't see any effort to rope in intellectuals of the calibre of Rajiv Malhotra or anyone close, to justify any of their actions. There is no daily press conference as in the US - where some articulate personality can convey the stance and viewpoints of the government. And - coming to fast moving industries of the future, this government seems absolutely clueless and worse perhaps does not even understand the implications of why they are important !

I would love to be proved wrong (believe me, I really really do) ....but that seems to be the unfortunate reality at this time. We do need to quickly upgrade to some real intellectual depth as part of the government and we need to see a gameplan for the future.

[Suraj]

Arjun, frankly your post segues into various different issues, starting originally from 'where are my MNCs ?' to AI to 'deeply anti-intellectual bias' . As such, I don't think your argument has any focus, so I won't address it further.

I already answered the question about government actions to foster corporate consolidation. As for the Chinese, I think they've shown great ability to throw lots of money at problems, not necessarily get commensurate RoI for it. We're going to spend quite a bit less because our federal budget is a ~quarter of theirs, which in turn is because our GDP is too.

Most of the latter half of your post is political in nature, and you know there's no space for that discussion either on this thread or forum, and you know where to go for that.

[Arjun]

Fair enough...I am only looking for someone to respond who recognizes the extent of the challenge.

[Suraj]

I work in the fields you wrote about. I'm familiar with Chinese presence in it, and deal with them directly. Like I said, they've shown great ability to throw a lot of money at the problem, not necessarily to get results to match. We have a very dynamic ecosystem of companies in the same fields, but without as much free money to swim in.

Chinese wastefulness is a boon to India. I would hope they keep throwing enormous sums at problems while getting drastically less gains on it than commensurate with the investment, because that's the easiest way we can catch up with them despite starting behind and having less money to throw at problems, and therefore being able to extract more RoI by being leaner and focused. And of course, grab the fruit of their work whenever we can, by any means possible. AI/ML by its exploratory nature right now involves a lot of trial and error effort, and we're better served by keenly tracking and appropriating the best options, paid for by the investments of others.

It's very much true that our lack of homegrown social media platforms and our preference to simply grab what the west offers, is extremely concerning, particularly from a national data security perspective, but also from an economic one. Shiv already has a pithily titled thread on it in the Strat forum. You can post in there, but take your political shoes off at the door...

[Yagnasri]

On creating big banks etc, I have an alternative view. While we need big and very big banks we also need banks of all sizes. Big size banks are not showing interest in SME loans or small size loans. In our country, there is a huge need for proper lending in these areas. Here Mudra scores. But we need more Mudra loans not just because such loans driven by political leadership but because there are institutions who normally give such loans. As of now it is very difficult to get a small loan from big banks. I fear as PSU banks become merged and bigger PSU banks emerge the SME and smaller borrowers find themselves not getting any credit. While Small Banks (which can not lend above Rs 20 Lakhs) are a good initiative by RBI, we need more to be done in this area. Maybe a regulatory requirement on the size of lending by the banks or something like that.

[Arjun]

I work in the fields you wrote about. I'm familiar with Chinese presence in it, and deal with them directly. Like I said, they've shown great ability to throw a lot of money at the problem, not necessarily to get results to match. We have a very dynamic ecosystem of companies in the same fields, but without as much free money to swim in.

Throwing money at the problem - definitely that has been the complete hallmark of Chinese strategy for each and every challenge, whether economic or geostrategic! Most industries today are moving to a winner take all model where the better capitalized firms are going to win out in the end...And that precisely has always been India's problem for the last 4 centuries - this excessive adulation of small-scale, low funded enterprises at the expense of creating well-capitalized giants who can take on the world. Chinese thing BIG - Indians think SMALL!

Also its not just about corporate investment - but also about university level focus in producing research / papers / patents in specific areas.

Can you share any parameters to support the statement that results have not matched up to Chinese spend in the industries of the future? That is not what I am seeing and I am a pretty avid tracker of many of these parameters.

You can post in there, but take your political shoes off at the door...

I have no leanings to a particular party or person - but only to an agenda - what I define as the center-right agenda.

[Suraj]

It does not matter how you verbally massage it - politics vs 'center right agenda'. There's an another forum suited to it, either way

[Arjun]

Ok lets keep politics off the table if that is how you define it.

If you or anyone else can share statistics on how China is not up to the game in the industries of the future, I am definitely interested!

[Supratik]

India is doing quite alright inspite of speed-breakers like high level corruption between 2010-2014. The Chinese liberalized 13 years before India and India is more or less at a similar place as China was 13 years back in most parameters. You have the right questions but the wrong answers. When you start a race late you will always play catch-up. Your answer lies in economic history and why India failed to grasp the failure of socialism early. India is going to be a 10-12 trillion dollar economy by 2030 (optimistic) or early 30s unless some catastrophe takes place. China growth is going to slow down to around 5% in my prediction. So take a pop-corn and enjoy the ride.

[vijayk]

https://economictimes.indiatimes.com/in ... 653097.cms
Bad loans shrink for first time since Modi's war on NPAs began

Stressed loans - which include non-performing as well as restructured or rolled-over loans - eased 0.4 per cent from three months earlier to Rs 9.46 lakh crore ($148.3 billion) at the end of September

Stressed loans at the country's 21 state-run banks were Rs 8.25 lakh crore at end-September, or 16.2 per cent of their total loans, according to the data received through a right-to-information request.

[qLoans that had been overdue for between 60 days and 90 days, and are at the highest risk of default, also eased to Rs 1.53 lakh crore as of end-September, from Rs 1.63 lakh crore at end-June, the data showed.

[Rahulsidhu]

Apologies if this article has been posted before. IMO this is exactly the right policy prescription.

https://swarajyamag.com/world/trumps-tr ... -for-india

Quoting from the article:

Actually, high economic theory has plenty of support for much derided industrial policy and judicious trade protectionism. First, the manufacturing sector is at the heart of development and progress. Outside of few island and city states, no country has developed without a large manufacturing sector. We associate Switzerland with Yash Chopra movies and secret bank accounts of netas. Yet, the manufacturing sector is substantial even today.

Second, there is a steep “learning by doing” curve in manufacturing. In other words, the more you engage in manufacturing the more your productivity and efficiency increases.

Third, there are network externalities and spillover benefits to promoting the manufacturing sector. The more you make, the more other ancillary industries benefit from locating near you — which is why we have industrial clusters, such as Detroit, and innovation clusters, such as Silicon Valley.

Fourth, MIT economist Ricardo Hausman has argued that greater the complexity of the structure of production the more prosperous the nation. So, there is reason for promoting a diverse economic base. To be sure, such justifications for protectionism and industrial policy have often been abused and have led to terrible policies. Many older Indians will wince when they recall days of waiting five years for a scooter and when domestic products were shoddy. Yet, these failures generally stemmed from other disastrous policy choices not protectionism per se.

[Austin]

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