Indian Economy: News and Discussion (Apr 1 2011)

[UBanerjee]

Wrdos,

Just to point out literacy in India is NOT English literacy. Our native languages are every bit as complicated as Mandarin Chinese, though I've heard Cantonese is easier.

My native tongue Tamizh has 12 Vowels and 18 Consonants with another rarely used special character. They combine to produce 216 characters which one must know to write. Functional literacy in India means being able to read and write a short paragraph using these characters.

Not only that most people in India know 3-4 languages, all with incompatible scripts and different grammatical structure.

This has made literacy a significantly more difficult project for India.

On the internet Tamizh is increasingly communicated using the Latin alphabet. 26 simple characters. Yet officially this is opposed tooth and nail.

I actually don't think this is true. Having grown up with several chinese friends here in the states, not one of them can comfortably read a newspaper in the language despite having gone to "chinese school" for several years and being all around bright guys academically. Meanwhile without any formal instruction I can read Bengali, even though it has many, many "juktakkhor" (joined letters) that often are completely new characters themselves (unlike Devanagari where the joined letters are very obvious).

Because ultimately it's still a phonetic writing system; formally I believe most Indic languages are "abugidas". The 2000 character estimate our friend gives above is a bit of a lowball actually for even functional literacy, let alone reading higher literature.

The Chinese literacy rates are pretty incredible when viewed in this light. Literacy in Indic languages is more similar to getting literate in English, which despite having a far simpler letter system has some ungodly complex pronunciation rules for actually reading things.

Vera, you said:

How can one infer from your original post that by "people" you meant 98-95% people, not 100%?
So now are you saying that 2-5% people are enough to grow all food needed for 1.2 billion people of India or do you want to further revise this figure?

I don't get what you're driving at. Clearly suggestion isnt that 100% of people leave farming But it is a laughable idea that if a majority of our population fails to toil away at unproductive agricultural work we will have problems feeding the nation. Most of these people are eking out a subsistence living by working on the land of others or on tiny plots on their own. That is not a recipe for feeding the nation or prosperity.

Actually it gets easier to feed the nation the more you consolidate agriculture and introduce modern, capital-intensive practices.

[somnath]

^^^UB ji

absolutely. Mandarin is one of the tougher languages to master. In Singapore Chinese kids going to the best schools opt for pvt tuition in the subject!

Separately, the land acquisition riots in UP seems to continue unabated. We had briefly discussed the land acquisition issue earlier, but a legislative fiat is now necessary. State govt in cahoots with highway robber baron industrialists like the crooks from jaiprakash in this case are screwing up larger infra projects.

The Haryana model is perhaps the best for land acquisition, time to finery that into a central legislation and ram it down.

As a side point, jaiprakash was included I think in the forbes billionaire list. To think some people take pride in these crooks and support giving them tax breaks!

[ArmenT]

UBJi, you're absolutely right. Chinese characters are much harder to master, as there is no correlation between how the word sounds and how it is written. So even if a person knows how to say the word, they do not necessarily know how to write it out. On the other hand, it expresses more ideas in a smaller space and the written characters express the same idea in various Chinese dialects, even if they're pronounced differently in different dialects. As my Caucasian friend who's married to a Chinese puts it, "when two Chinese people meet and talk for the first time, the first five minutes is not a conversation, but a protocol negotiation to find a common dialect that they both speak."

Also, I always felt North Indian languages were easier to master than Tamil (or Tamizh, as Theo_Fidel puts it). Speaking from personal experience only, as I read and write both Hindi and Tamizh and while I never really learned to read/write Bengali despite being a native speaker, I found I could read and understand a fair amount given a guide book that shows the Bengali alphabet. Tamil alphabet has a bunch of 'n' and 'r' letters, but no difference between 'p' and 'b' or 't' and 'd'. Also, spelling becomes an bigger issue in Tamil because there doesn't seem to be any logic for which of the 'n' or 'r' letters to use in a word and most of my Tamil friends couldn't tell me either.

Speaking of agriculture, most advanced countries have only 2-3% of their people engaging in agriculture activities and still manage to feed their people. However, they can do this because they use heavily mechanized methods of farming and also have reliable water and electricity supply. Without these in place first, it is impossible for India to replicate the same.

[shyam]

You guys say that Tamizh is tough? Then bring in Malayalam that will drive most of the people nuts. Frequent use of sounds like "nga" "nja" etc. will drive you crazy.

[vina]

Tamil because there doesn't seem to be any logic for which of the 'n' or 'r' letters to use in a word and most of my Tamil friends couldn't tell me either

I am barely literate in Tamil and your Tamil is probably much better than mine, but from what I can remember, the small "n" as in "Nai' (dog) is the na that is always used first, never the double jalebi joined together na in the first. Similarly, the jalebi with a downward tail ra is never used in the first.

[Marut]

<OT>

Regarding Tamizh letters for 'n' & 'r' usage, you only have a 25% or 50% chance of being right as my sister puts it.
Since I am not in school anymore, I am quite liberal about using any of the 'n' or 'r' letters. The reader gets the message anyways.

</OT>

[Jaspreet]

I don't get what you're driving at. Clearly suggestion isnt that 100% of people leave farming But it is a laughable idea that if a majority of our population fails to toil away at unproductive agricultural work we will have problems feeding the nation. Most of these people are eking out a subsistence living by working on the land of others or on tiny plots on their own. That is not a recipe for feeding the nation or prosperity.

Please read my reply to Somnath. Then you'll get it.

[Theo_Fidel]

Again last OT I promise...

The present consensus is that the Tamizh script used presently was adapted to fit the language. There are many small variations that are not necessary for the spoken language yet must have been needed for the original tongue the script was written for. The long period of writing on leaves too affected how the script is written as 'pulli' marks would have damaged the leaves and hence their value was reduced consciously. The strong consensus is that the present script is descended from Brahmi, brought by Jains, which is again strongly thought to have descended from Aramaic (the language Jesus spoke). There used to be native original script, Vathaluttu, literally 'Rounded Script', expressly created for Tamizh but it was unfortunately abandoned. Spoken Tamizh is thought to be much much older than this. One must remember that genetically the first wave of humans out of Africa 80,00 years ago got to India and continue to live in us. One of the very few places on Earth this is true. The second wave too happened 40,000 years ago. There must have been a language way back then too, now long gone, from which spoken Tamizh has descended at least in part.

For those interested P.T.Iyengars 'History of the Tamils', (I have a 1929 first edition copy) has a fascinating account of the different iterations of script and usage over time. Must warn you that it is filled with some of the misapprehensions of timeline and cultural influence that was in vogue then, a good read never the less. I do like the older more rounded prose prevalent then. A more substantial and upto date reference is KAN Shastri's 'History of South India', (get the 2005 version, it is much updated). As long as you are out there, you must also get M. Varadarajans classic 'A History of Tamil Literature', which is a lot more vernacular and lyrical as it was first written in Tamizh and then translated, bit harder to read and follow. For me, it is my master reference.

[SwamyG]

Speaking of agriculture, most advanced countries have only 2-3% of their people engaging in agriculture activities and still manage to feed their people. However, they can do this because they use heavily mechanized methods of farming and also have reliable water and electricity supply. Without these in place first, it is impossible for India to replicate the same.

On the flip side to that is 95+% of the population are dependent on these small percentage. To me it is like the risk is not spread wide enough. And what is the rest going to do? Manufacturing and Services? How does one prevent Philipines or Vietnam taking away these jobs? I am not advocating 60% remain tied to Agriculture, but to 2-3% is a very small number - to my uneducated mind.

Theo: I recently finished reading Manimekhalai in English. Breathtaking. I was not schooled in tamil to read it in tamil. Sad.

ps: Any more talk on tamil, the "Mylapore School" term will get further entrenched in this dhaaga. This dhaaga is filled with Mallus and Thambis And a few friendly Commie birathers from Bengal.

[somnath]

^^^yeah, the 2-3% number is a long shot for India. The sort of mechanization seen in places like Europe and america is just not possible in India- land holdings are too fragmented, and there are land celing laws that are restrictive. But the number will go down, it's already happening.
And Indians and land have a different relationship than just economic - just look at the level of opposition to land acquisition efforts. So we are going to have a large agri community yet, though smller than today

[Vipul]

Subbarao seeks 'formal autonomy' for India's central bank.

[Theo_Fidel]

WRT to the agriculture population, the less population we have in agriculture the better. Mechanized agriculture has less than 2% of the population involved. 2% of the US population is 7 million. About 150 years ago this would have been 50% of the US population. This is not a insubstantially small proportion. In any case with industrialized farming the small farmers are being squeezed out. No one wants to work 4 AM to 10 PM every single day including holidays w/ zero vacations. Increasingly Hispanic immigrants are taking over these farms.

Indias standard should be closer to the Southern European countries. About 8%-10%. Right now we are at 50% +.

All this talk of GDP and Wealth and Agriculture made me go and dig through my hard drive for a whole series of charts I did waaay back for my reference. Here is one. I updated it with Bangladesh. Data is taken from the Worldbank 2005 report on wealth of nations. You can go there to read the methodology. I think it is still available there.

You can see why we need to get to $150 Billion in wealth if we want a per capita income of $10,000. Note that the Intangibles are stuff like honesty, ease of doing businessmen, education levels, esp. higher education, trust factors, patents, intellectual property, etc.

Edit - All the tables on the left are in per capita dollars.


I could not bring myself to put in US, Germany, etc. Way too depressing back then and still is. You can see why things like NREGA only produce poverty. It doesn't improve a single indicator on this list of national wealth.

Even to get to Greece income levels (admittedly a low benchmark), we would have to invest approximately $50 Trillion in urban infrastructure/production infrastructure over the next 20 years and get our per capita level to $75,000 from about $2,000. And here we have a PM talking about $1 Trillion over the next 5 years. Kanjus.

[VenkataS]

If 3% of our population is in farming, it would mean out of 1.2 billion we have 36 million people employed in agriculture.

In India we have 162 million hectares of arable land, that would allow about 4.5 hectares per individual farmer or about 11 acres per farmer.

If you only consider irrigated land, India has 55 million hectares of such land.
That would mean 1.52 hectares of irrigated land per farmer or about 3.77 acres per farmer.

These are not huge landholdings by any means, in fact in the irrigated land case the land per farmer may not be enough to introduce mechanization even which we sorely need to boost our agricultural output.

So to answer the question whether it would be possible for 3% of the population to feed the rest I say it is very much possible.

Please keep in mind that 3% here represents only the land-owners who may have dependent families, so the population percentage dependent on agriculture would probably be around 10-15%

But in-order to achieve this (say in the next 20 years) we would need to move the majority of current population engaged in subsistence agriculture to the more productive industry and services sectors. For this to happen they would need to be literate and possess employable skills. To my knowledge we have no such programs for adult illiterates.

Instead we have the NREGS which perpetuates the poverty cycle, empoys individuals in unproductive work, and does not benefit everyone. Is something like the NREGS the best we can do in 2011?
Why not distribute foodstamps for desperately poor individuals with the requirement that they enroll in free adult literacy/employable skills programs and work towards getting employment in productive sectors of the economy.

[VenkataS]

You can see why we need to get to $150 Billion in wealth if we want a per capita income of $10,000. Note that the Intangibles are stuff like honesty, ease of doing businessmen, education levels, esp. higher education, trust factors, patents, intellectual property, etc.

Theo_Fidel,
It is difficult to interpret the data in the tables that you posted. In the first table are the figures in per capita dollars.
Also did you mean to say $150 trillion in wealth (from the present $11 trillion) for a per capita income of $10,000 for India.

Also these figures appear to be counter-intuitive, it is difficult to fathom Israel and Iran having more wealth in crop land than we do, or Japan having more wealth in pasture land than we do.

The major components of the wealth where we seem to be doing badly are "Produced capital + Urban land" and "Intangible capital" (what does "Intangible capital" even mean).

[Theo_Fidel]

Venkat,

Yes it is kinda hard to read. I just grabbed it and tossed it on. This is just some randomly selected countries. The full list is in the world bank report.

You are basically correct. Every thing to the left of 'Total Wealth' is in per capita dollars. So with a per capita 'Wealth'/capital stock of $12,000 or so every Indian generates $1,200 of annual income.

On a per capita basis I'm not surprised Israel and Iran are higher in cropland value. Their agricultural productivity is much much higher per acre as is their investments. India has one of the lowest agricultural productivity in the world. A major reason is that our irrigated land is relatively unproductive so our marginal lands have been brought under the plow. This lowers it even further. Japan has one of the highest agricultural productivity in the world but very little land. So on per capita basis the value is low.

If you do the math our cropland has total value of $1.5 Trillion. Israel's has a value of $12 Billion. Iran's has a value of approx $150 Billion. Japan's about $80 Billion. Sounds about right.

P.S. I went back and looked at the value of cropland in Massaland. About $800 Billion.

SwamyG,

I remember reading Manimekhalai after Chilappathikaram in Tamizh way back when I was just out of my teens. It was very heavy going and I never finished, my youth was probably against me, esp, after reading the breath taking passion and high emotion of Chilappathikaram. As a youth I found some of the ethical positions very distasteful.

Which English edition are you reading. I might try again.

[SwamyG]

Theo: It is Alain Daniélou & Iyer, Manimekhalai: the Dancer with the Magic Bowl by Shattan, New York, 1989.

How do you come up with the numbers? That is 2% and 50% are bad, but 8-10% are good? Granted I do not have an answer myself, I am curious to know the hows and whys of the number.

[somnath]

If 3% of our population is in farming, it would mean out of 1.2 billion we have 36 million people employed in agriculture.

In India we have 162 million hectares of arable land, that would allow about 4.5 hectares per individual farmer or about 11 acres per farmer

You ignore the political and social realities of India...Land ceiling laws on one hand and a deep and almost spiritual relationship that people have with land on the other...While the share of population involved in agri will reduce over time, 2-3% will take a reall really long time..And as the sage said, in the long run we are all dead!

Instead we have the NREGS which perpetuates the poverty cycle, empoys individuals in unproductive work, and does not benefit everyone. Is something like the NREGS the best we can do in 2011?
Why not distribute foodstamps for desperately poor individuals with the requirement that they enroll in free adult literacy/employable skills programs and work towards getting employment in productive sectors of the economy

Paraphrasing the same statement, giving tax breaks on SEZs perpetuates crony capitalsim, benefits the same crooks (like KP Singh, Jaiprakash Gaur and Shahid Balwa and their ilk) to shift taxable income into taxfree, and incrementally benefits almost no one barring these families!

But seriously, what is the evidence that NREGS "perpetuates" poverty? Of course it doesnt benefit "everone", it is not meant to..It is meant to benefit the bottom 40% of the population only..Foodstamps is an excellent idea in theory...And there is movement towards variations of the same in the form of Direct CAsh Transfer (DCT)..But right now, how do you ensure adequat coverage and acceptable efficiency in a food stamp scheme? Refer back to the paper by Abhijit Sen and Himanshu I posted earlier.The "Targeted PDS" covers significantly less (of the vulnerable groups) while having significantly more leakage than a universal PDS...NREGS tries to resolve that through the provision of a "works" programme, which makes it "self opting out" and universal...In layman terms, it means that only those who really need it will partake of the benefits of the scheme...It is self selecting...

Over time, as we have a better handle through UID, expect this to morph into a DCT programme...But it is also crucial to remember that DCT by itself isnt a panacea..It creates affordibility, not access. In many ways, there will still be need for publicn intervention to ensure the latter..Today's IE has a good article by Jean Dreze on this..
http://www.indianexpress.com/news/the-c ... a/788791/0

But fundamentally, besides rhetoric, there is really no "politico-economic" rationale for saying that NREGS is "bad"...

Certainly there is far more economic logic to the programme than voodoo mathematics of calculating GDP potential from "wealth" (that concept isnt technical, Fixed Capital Formation is, but even that) and comparing it across countries at vastly different stages of development...

[vera_k]

^^^

People care about their land because they have no other way to feed themselves. The "deep spiritual connection with the land" is a myth disproven both by the continued existence of Pakistan , and by how little the middle class in the cities today cares about the land their forefathers left behind.

The process of industrialisation can be sped up by building cities and towns for the express purpose of moving workers into them off the farm. But this is where it is not certain that India can be successful, because this process so far has been done under authoritarian regimes. China and South Korea had authoritarian rulers, and even the USA and England did not extend the vote to everyone while they were industrialising.

[somnath]

People care about their land because they have no other way to feed themselves. The "deep spiritual connection with the land" is a myth disproven both by the continued existence of Pakistan , and by how little the middle class in the cities today cares about the land their forefathers left behind

Partially true..But not wholly so IMO...During the Singur agitprop by Mamta Bannerjee, someone did an interesting analysis of the repsective economic payoffs..If the landowners in singur simply took the money and invested it away in a bank FD, they would generate better incomes than farming the land in parcels that they had..Yet, we had massive resonance to Mamta's call...

And we see that replicated all over the place...The issue to me is about skills...Most small and marginal farmers dont know anything else as a vocation..Hence selling off land seems to be a jump into the unknown, even if the financial deal is better at the margin...

And yes, it is tougher in a democracy..Which is why I think we are yet going to have a very large number engaged in farming, certainly much more than 2-3%, for a long time to come...

[Theo_Fidel]

Thanx SwamyG,

Will look it up.

WRT to industrialization I explained the 8-10% in the very line above it. That is the level Europe was at when its per capita income was $10,000. Thought it was a better, slightly less industrialized bench mark.

The way urbanization worked in Europe was that villages grew bigger and bigger and gradually became cities. The people didn't really move that far. This is what is happening in TN with a urbanization rate of 55%. Fifty years ago, Rameshwaram, Kanchipuram, Virudhunagar, etc were considered large villages. Today they are small cities. There is no way to plan this. Around Vellore I traveled to several small villages 10 years ago where entire streets were abandoned and closed crumbling old houses pock marked the villages. As the old die away the young refuse to move back to isolated hamlets. Here's a small hamlet outside Gudiyattam gradually dying away.

[vera_k]

Financial literacy is not a strong point for most, even assuming that they were getting a fair deal. The high inflation makes it even more tricky for the layman to judge what would lumpsum would buy a inflation-protected income stream. To that end, perhaps the compensation for land should always be akin to a inflation indexed annuity.

The key thing is that the children that constitute the so called demographic dividend have to be educated enough such that they are able to and will want to work off the farms. After that, the reduction down to 2-3% will happen as a consequence of natural mortality.

[vera_k]

The way urbanization worked in Europe was that villages grew bigger and bigger and gradually became cities. The people didn't really move that far.

I wonder if India has the time to do this as slowly as Europe, given the excessive focus on reducing fertility. The risk of getting caught in the middle income trap increases with demographic transition as the number of workers starts falling.

[somnath]

To that end, perhaps the compensation for land should always be akin to a inflation indexed annuity.

That is precisely what the storied "Haryana model" that I referred to does...It provides the landowner with a lumpsum amount, and then tops it up with an annuity for 33 years, inflation-indexed.

The issue really is archaic laws - the land acquisition Act is 19th century vintage...So policy is at the whim of executive action...sometimes preferred, as it retains options for rent seeking on the parts of all parties concerned!

[SwamyG]

People care about their land because they have no other way to feed themselves. The "deep spiritual connection with the land" is a myth disproven both by the continued existence of Pakistan , and by how little the middle class in the cities today cares about the land their forefathers left behind.

It is the disconnection with land that can cause a problem. I am not advocating all of us take up farming. The apathy of humans decrease with the increase in distance of an idea or matter to themselves. Only the most discerning makes it a point to keep abreast of the idea or matter. And if they are not well informed then they could be manipulated to be part of an enterprise that can cause harm to the idea or matter that are at a distance.

I categorize all abstract as ideas. For example Zionism and India. Indians are more aware of EJs and Mullahs because of greater familiarity. I categorize all concrete manifestations as matter. For example environment and humans. In the early days of Colonialism, the aam admi in Europe knew little about how the Corporations fought wars and looted the World. Or the aam American citizen's disconnect with the World because they know very little about the impact American foreign and economic policy on the World. How good people know how IMF and WB operated? How many knew how the rating agencies behaved?

The point is when we are far removed from the land, the tendency to mistreat increases. It becomes someone's problem. This disconnection drives lot of our economic activities, with both benefits and harm. Life moves on.

[SwamyG]

WRT to industrialization I explained the 8-10% in the very line above it. That is the level Europe was at when its per capita income was $10,000. Thought it was a better, slightly less industrialized bench mark.

What might work for a region or country, does not have to necessarily work for another region or country. I would say with a large population and food security in mind, the country has to also think about improving its policies that increase the efficiency in farming, storing and distribution. The goal should be 0% starvation - short-term and long term. The excess could be exported or stored for rainy days. Considering our population I would say we ought to look at more than 8-10%,

[somnath]

We were discussing sometime back the interesting issue of the policy credibility of RBI...

This development brings the issue sharply into focus..

Subbarao opposes the idea of a Debt Management Office
http://www.financialexpress.com/news/de ... o/788014/0

DMO is an old idea, basically tries to impart the central bank with a core area of acocuntability, ie, inflation targeting, while taking away the responisbility of funding the govt..the two are often contraditory..

Pranab Mukherjee spoek of establishing the DMO this year in the budget..Now Subbarao comes out swinging against it...Either he is serious about all the stuff he said on inflation last week, or he is simply posturing..One of the weak links in India's monetary policy management is this vague distribution of accountablity with RBI..It is only when RBI, like most central banks around the world have an exclusive, defined mandate on inflation can they truly demand autonomy, and be held accountable in return..In absence, its just turf wars, govt style..

[UBanerjee]

WRT to industrialization I explained the 8-10% in the very line above it. That is the level Europe was at when its per capita income was $10,000. Thought it was a better, slightly less industrialized bench mark.

What might work for a region or country, does not have to necessarily work for another region or country. I would say with a large population and food security in mind, the country has to also think about improving its policies that increase the efficiency in farming, storing and distribution. The goal should be 0% starvation - short-term and long term. The excess could be exported or stored for rainy days. Considering our population I would say we ought to look at more than 8-10%,

Actually "we ought to look at X%" is what is entirely wrong in the first place- especially based on some top-down theorizing. What we should look to do is increase incomes and opportunities- and the X% involved in agriculture will retain a natural equilibrium.

I will say this though- the romance of agriculture is much easier when you're not the one toiling in the fields day-in, day-out. It is one of the most miserable professions for the average farmhand in terms of work put in and output received - which is why in every country on earth, people leapt at every opportunity to get the hell out and do anything, even work in soot-covered factories paying a small steady wage. Also keep in mind humans have only been engaged in real agriculture for 10,000 years, give or take a few thousand. There is nothing in human biology tied to agriculture, it is as artificial as working in any other profession.

[nandakumar]

Slightly off track. For the amusement of those familiar with the tamil language a small concession moderator may please permit it.
vina

I am barely literate in Tamil and your Tamil is probably much better than mine, but from what I can remember, the small "n" as in "Nai' (dog) is the na that is always used first, never the double jalebi joined together na in the first. Similarly, the jalebi with a downward tail ra is never used in the first.

Not only that the letter 'ra' as a heavy consonant (in the sense of an added emphasis in pronounciation that requires the tongue to touch the upper palate and trace a path around it) can not be used as the first letter there is also a rule about the letter 'ra' as a middle consonant (where the tip of the tongue just lightly touches the upper palate) as well.
Not quite sure about the grammar rule in this case. But I do know that wherever a word requires the use of the 'ra' the middle consonant as the first letter, it is usually prefaced by the vowel 'a'. Thus a name such as 'Ranganathan' is written as 'Aranganathan'. But the name 'Rangiah' is however written as 'Erangiah'. That usually draws a guffaw from those reading it aloud as the word could be taken to mean that the person so addressed is being asked to 'climb down'

[shaardula]

Wrdos,

Just to point out literacy in India is NOT English literacy. Our native languages are every bit as complicated as Mandarin Chinese, though I've heard Cantonese is easier.

My native tongue Tamizh has 12 Vowels and 18 Consonants with another rarely used special character. They combine to produce 216 characters which one must know to write. Functional literacy in India means being able to read and write a short paragraph using these characters.

Not only that most people in India know 3-4 languages, all with incompatible scripts and different grammatical structure.

This has made literacy a significantly more difficult project for India.

On the internet Tamizh is increasingly communicated using the Latin alphabet. 26 simple characters. Yet officially this is opposed tooth and nail.

OT.
if i may add my two cents here. learning to read indian languages is fairly easy especially if you know the spoken version. this is because almost all indian languages have one-to-one correspondence between how the word sounds and how it is written. the writing is syllable-based. and syllables are generated like multiplication tables (in kannada syllable table (varnamale) is called ka-gunita = ka-tables)

syllable = svara*vyanjana = vowel*consonant, when spoken and when written.

when learning to read, you need to learn to identify the gyphs for consonants and its modifications with respect to vowels. and in most cases the modifications are consistent.

because of this if you can even read old scripts (which you were never trained in) if you stare at it hard enough. and one can learn to read street signs and bus boards etc in a new script.

dravidian non dravidian does not matter- the calculus of all indian languages is very similar or atleast closer to each other than they are to say chinese or french or english.

added. the glyphs themselves although consistent can be intricate. perhaps that is what theo was saying about difficulty. there may be a case to simplify the script without throwing out the logical consistency of the system.

[Suraj]

Now that everyone has received plenty of latitude in this regard, let's not have any more expositions on languages in this thread, please

[nandakumar]

Industrial production rebounds in March

NEW DELHI (Dow Jones)--Robust manufacturing activity drove a sharp rise in India's industrial output in March, adding to expectations that the central bank will tighten monetary policy further to control inflation.

Factory output rose 7.3% in March from a year earlier, a much bigger increase than February's 3.65% rise, government data showed Thursday.

The reading nearly was nearly double the median estimate of a 3.80% rise in a Dow Jones Newswires poll of 16 economists.

The strong industrial output print shows Asia's third-largest economy has held up strongly even as the Reserve Bank of India has aggressively tightened policy over the past year. It also could reinforce expectations that the RBI will raise interest rates further as it seeks to cool price pressures.

Finance Minister Pranab Mukherjee said the sharp rise in output signaled the beginning of a sustained upturn in industrial activity.

"Some improvement has taken place, but I expected a little more," Mukherjee told reporters.

Indian government bonds came off their early highs as expectations of more rate hikes grew. The 7.80% bond due in 2021 fell to INR96.85, from INR97.00 before the data.

Economists said a comparison with a relatively high level of production in the year-earlier period is also masking the true level of industrial activity. Indeed, sequential data showed a 17% rise in industrial output from February.

However, some economists say industrial production growth could ease as credit becomes more expensive. The RBI quickened its tightening pace May 3, raising the lending rate by a larger-than-expected 50 basis points, after eight hikes of 25 basis points since March 2010.

Bank Of Baroda Chief Economist Rupa Rege Nitsure said the data reflect underlying strength in growth momentum and will ease any RBI concerns about fighting strongly against inflation.

Jay Shankar, chief economist at Religare Capital Markets, said the central bank may tighten its key lending rate by 25 basis points at next month's policy review, though a 50 basis point move can't be ruled out. Inflation data for April, due out Monday, will be key, he said.

"If the April inflation number is nasty, we cannot completely rule out a 50 basis-point hike on June 16," Shankar said.

Inflation was at 8.98% in March, far above the RBI's 8% forecast. The central bank raised its inflation forecast three times last fiscal year as rising food prices and demand pressures caused price gains to consistently beat expectations. High global commodity prices, especially of crude oil, could further stoke domestic price pressures.

Most economists expect the RBI to raise rates another 75-100 basis points by next March to tame price pressures that have spread from food items to non-food manufactured products.

Manufacturing output, which has an 80% weight in the industrial production index, rose 7.9% in March from a year earlier, after a 3.6% rise in February.

Capital goods output, which has been worst hit by the steady rise in borrowing costs, expanded a robust 12.9% on-year in March, after three months of declines.

Industrial output increased 7.8% in the fiscal year ended March 31, following 10.5% growth the fiscal year before.

Output of consumer durables rose 12.3% on-year in March, compared with February's 23.5% rise.

Mining output growth slowed to 0.2% in March from a year earlier, from February's 1.03% growth.

Electricity output grew 7.2%, compared with a 6.7% rise in February.

[Hari Seldon]

V Ananta Nageswaran critiques Jean Dreze's proposals. Remarkably, there are parallels with the debate in the dhaga a page or so ago. Gist being that delivery mechanisms need to be reformed and verified before more load is handed down that channel.

Recommended read, IMHO.

Cash vs. Food]Cash Vs Food

Some excerpts:

What is disappointing about the piece is not its listing of the difficulties of implementing conditional cash transfers when the public services on which they are supposed to be spent, are either non-existent or inefficient.

But, therein lies the contradiction in the piece: if, after incurring 25% of the health expenditure in the public sector, the health delivery is abysmal, then what is the point in enacting Right to Health, Right to Food, Right to Education to be delivered via the public sector?

The disappointment with the piece is not that it opposes conditional cash transfers. I will come to that in just one moment. But, the piece does not acknowledge the abysmal delivery of public services that exists in India while it calmly advocates sticking to the status-quo mechanisms. That is neither intellectually honest nor rigorous.

After all, the NAC has been around as long as the UPA has been in office – since 2004. It has not come up with one concrete blueprint for improving the delivery (and accountability of such delivery) of public services in India and campaigned for it. It has merely expanded the scope for the public sector to siphon off more money from the taxpayers in the name of serving the poor. Further, their ideas have reinforced the culture of dependency. The poor have lost their dignity in India thanks to the NAC.

Public Policy making is about being open-minded and being willing to experiment and learn from it. There is no role for ideologues on either side and hence there is no reason to be prescriptive. When the status quo is as bad as it is in India, the least that is expected of those who are influential in policy-making is to be open-minded about alternative ideas and being constructive about ironing out the conceptual limitations of such alternatives.

Mr. Dreze’s article fails these tests rather easily. He does a great disservice to the poor by batting for status-quo. I hope he does better with his next essay.

Instead, he should be writing about these injustices done to the farmers, in the name of being pro-farmer. The biggest problem with India’s pro-poor, pro-farmer agenda is its hypocrisy.

Find myself agreeing more than sceptical only.

[somnath]

V Ananta Nageswaran critiques Jean Dreze's proposals. Remarkably, there are parallels with the debate in the dhaga a page or so ago. Gist being that delivery mechanisms need to be reformed and verified before more load is handed down that channel

IMO VAN is missing the point Jean Dreze is making...Which is encapsulated here..

A wholesale transition from the PDS to cash transfers in rural India would, in my view, be misguided and at the very least premature. For poor people, food entitlements have several advantages over cash transfers. First, they are inflation-proof, unlike cash transfers that can be eroded by local price increases, even if they are indexed to the general price level. Second, food tends to be consumed more wisely and sparingly; cash, on the other hand, can easily be misused. Third, food is shared equitably within the family, while cash can easily be cornered by selfish individuals. Fourth, the PDS network has a much wider reach than the banking system. In remote areas, where the need for social assistance is the greatest, banking facilities are simply not ready for a system of cash transfers (as it is, they are unable to cope with NREGA wage payments). Last but not least, cash transfers are likely to bring in their trail predatory commercial interests and exploitative elements, eager to sell alcohol, branded products, fake insurance policies or other items that would contribute very little to people’s nutrition or well-being.


Of course, cash transfers have their advantages too: they have lower transaction costs, are (potentially) more convenient for migrant labourers, and may be easier to monitor. Sometime in the future, when the banking system has a wider reach and the food security problem has been resolved, a cautious transition to cash transfers may be advisable. Indeed, I am not averse to the idea of a “universal basic income”. But this is a somewhat futuristic idea, and for the time being, food is best.

The storied examples of Bolsa in Brazil of CCTs is all about the fact that "access" was already provided for, and CCT increased affordability..In India, till the time we resolve access issues, we cannot wholesale shift to CCTs...Its a transitory phase not the end state...

the logic is similar to why NREGS isnt simply an (unconditional) cash transfer scheme..Simple, because we havent found an effiicient way of "targeting" yet (refer to Himanshu and Abhijit Sen - posted earlier)...Once UID and greater banking access (through the new mobile banking regs) fall into place, NREGS will morph into a UCT scheme...

[nandakumar]

V Ananta Nageswaran critiques Jean Dreze's proposals. Remarkably, there are parallels with the debate in the dhaga a page or so ago. Gist being that delivery mechanisms need to be reformed and verified before more load is handed down that channel

IMO VAN is missing the point Jean Dreze is making...Which is encapsulated here..

A wholesale transition from the PDS to cash transfers in rural India would, in my view, be misguided and at the very least premature. For poor people, food entitlements have several advantages over cash transfers. First, they are inflation-proof, unlike cash transfers that can be eroded by local price increases, even if they are indexed to the general price level. Second, food tends to be consumed more wisely and sparingly; cash, on the other hand, can easily be misused. Third, food is shared equitably within the family, while cash can easily be cornered by selfish individuals. Fourth, the PDS network has a much wider reach than the banking system. In remote areas, where the need for social assistance is the greatest, banking facilities are simply not ready for a system of cash transfers (as it is, they are unable to cope with NREGA wage payments). Last but not least, cash transfers are likely to bring in their trail predatory commercial interests and exploitative elements, eager to sell alcohol, branded products, fake insurance policies or other items that would contribute very little to people’s nutrition or well-being.


Of course, cash transfers have their advantages too: they have lower transaction costs, are (potentially) more convenient for migrant labourers, and may be easier to monitor. Sometime in the future, when the banking system has a wider reach and the food security problem has been resolved, a cautious transition to cash transfers may be advisable. Indeed, I am not averse to the idea of a “universal basic income”. But this is a somewhat futuristic idea, and for the time being, food is best.

The storied examples of Bolsa in Brazil of CCTs is all about the fact that "access" was already provided for, and CCT increased affordability..In India, till the time we resolve access issues, we cannot wholesale shift to CCTs...Its a transitory phase not the end state...

the logic is similar to why NREGS isnt simply an (unconditional) cash transfer scheme..Simple, because we havent found an effiicient way of "targeting" yet (refer to Himanshu and Abhijit Sen - posted earlier)...Once UID and greater banking access (through the new mobile banking regs) fall into place, NREGS will morph into a UCT scheme...

The NREGS is actually relabelling of a long existing rural development programmes. I would like to narrate a personal anecdote of how this programme often degenerates into digging trenches and then filling it back.
I was once walking down a hilly road in a small obscure village in the Munnar area bordering Tamil Nadu and Kerala. Out of the blue there came into a view a bus shelter. A notice on the shelter said that the structure was constructed out of funds provided under the Integrated Rural Development Programme of the Govt. of India.
The structure looked decrepit in patches and the plaster was beginning to fall off. In one corner somebody had converted it into a makeshift cigarette/beedi and assorted snacks shop. My enquiries revealed that there used to be a once-a-day bus service to the village some time ago but even that had since stopped- an altogether common feature in rural India. It is quite likely that the construction cost was inflated. So there is diversion of funds upfront. A bus shelter in a place where there is no bus service is not much different from the traditional criticism that cash transfers often result in money being squandered by the head of the house in liquor.

[RamaY]

UUID project scope doesn't includebringing banking services to remote rural populace to make cash transfers efficient. Rural administration is already equipped to identify the beneficiaries unique identity.

Perhaps we should move the governance issues and discussions to proper thread as governance is a much bigger task than economic policy or management.

Economic growth doesn't bring good governance, or vice-versa, automatically.

The bigger problem in India is poor governance.

[somnath]

^^^^Ramayji
UID is independent of banking inclusion. That is being addressed separately, the most exciting developments are with new mobe banking regs - I posted th some time back. Together they have the power to make the process muchore efficient.

Rural admin equipped to "identify"? Did you read about the experience with "targeting" in PDs? You might want to read abhikit sens article I posted. Tracking of the individual with all his socioeconomic data can be dine once uid is in place. Then it can be linked to the persons phone and cash transferred to his simcard automatically. Encashable at any bank or retail establishment.

[vina]

A wholesale transition from the PDS to cash transfers in rural India would, in my view, be misguided and at the very least premature. For poor people, food entitlements have several advantages over cash transfers. First, they are inflation-proof, unlike cash transfers that can be eroded by local price increases, even if they are indexed to the general price level. Second, food tends to be consumed more wisely and sparingly; cash, on the other hand, can easily be misused. Third, food is shared equitably within the family, while cash can easily be cornered by selfish individuals. Fourth, the PDS network has a much wider reach than the banking system. In remote areas, where the need for social assistance is the greatest, banking facilities are simply not ready for a system of cash transfers (as it is, they are unable to cope with NREGA wage payments). Last but not least, cash transfers are likely to bring in their trail predatory commercial interests and exploitative elements, eager to sell alcohol, branded products, fake insurance policies or other items that would contribute very little to people’s nutrition or well-being.

Why cash alone ? Why not a mix of food and fuel coupons ? Something like a Sodexho coupons/ smartcards used in many IT/Vity companies today, rolled out on a national scale. Combine that with Uid and fingerprint readers at Points of Sale and Points of Issue, you can have a pretty leak proof /largely misuesable system (though what cannot be misused might well get abused for that fact by interested parties.. )

[Theo_Fidel]

The first thing to be done is to knock the Jean Dreze types off their high horses. Amartya Sen had the slick sense to move to massa land and live of the 'white burden' there. On the basis of performance, not one of their proposals has helped with poverty in 8 years, the NAC should self immolate and shut down. Of course if they had any honor ('mannam') that is. How about holding any of these snakes accountable for their performance. They have after all squandered more money than a dozen 2G scam. The catch is a CCT would put these types out of business. They don't give a fvck as it is not their money.

Meanwhile our national wealth is $12 Trillion and we need to get to $150 Trillion for prosperity. No one mentions that do they.

Jean Dreze is now starting to push what he calls a "universal basic income" as mentioned here. Whether people work or not they get a certain amount deposited in the bank. Nice! At which point the question is why work at all. Insanity.

Vina,

The PDS card was supposed to be our food stamp system remember. Instead the cards are often sold/leased to a money lender who then picks up the grain in bulk to sell on the open market. This impoverishes poor farmers even more. As long as are a poor country without decent paying jobs for 80%+ of the population this sort of stuff will happen.

Meanwhile, one of the best write ups about this particular poisonous snake.. ..you will never see it in /DDM though...

http://acorn.nationalinterest.in/2011/0 ... tao-hatao/

Even so, doesn’t he have a point when he says “why not ask them whether they prefer food or cash?” Not quite, because the question is a bit of sophistry. Basic economics will tell you that because cash is most fungible, if you give them cash, the question itself is redundant. If they prefer food they’ll buy food. If they prefer arrack they’ll buy arrack. Neither Jean Dreze nor the National Advisory Council, nor indeed the Government of India has any business dictating what an Indian ought to do with his or her income. Only ‘development economists’ of the dubious sort can think that development is possible when hundreds of millions of adult citizens have the right to vote and procreate but not to decide what to do with their money.

Mr Dreze’s pre-emptive salvo seeks to defend against the dismantling of the edifice of India’s old, failed and corrupt political economy of poverty alleviation. Ideologues confuse socialism for development. The vested interests that collect rent from the PDS, government hospitals, schools and suchlike are fighting to retain their spoils. Both have little interest in making Indians prosperous.

[RamaY]

the logic is similar to why NREGS isnt simply an (unconditional) cash transfer scheme..Simple, because we havent found an effiicient way of "targeting" yet (refer to Himanshu and Abhijit Sen - posted earlier)...Once UID and greater banking access (through the new mobile banking regs) fall into place, NREGS will morph into a UCT scheme...

I am talking about this part.

Today the postal service can execute a MO transfer based on existing voter list. Currently the voters lists are more reliable info as they are cross-verified by major political parties for bogus voters.

[RamaY]

Rural admin equipped to "identify"? Did you read about the experience with "targeting" in PDs? You might want to read abhikit sens article I posted. Tracking of the individual with all his socioeconomic data can be dine once uid is in place. Then it can be linked to the persons phone and cash transferred to his simcard automatically. Encashable at any bank or retail establishment.

Who is going to pay for the phone, you or Sri Abhikit Sen? Who will change all kirana shops and village market infra to accept sim card based cash balances?

I will give a personal example. In Andhra Pradesh Sri NT Rama Rao introduced Rs2/Kg rice scheme. In my village lots of SC/ST candidates got white cards with 25Kg per month quota.

My father was a teacher with Rs2000 salary in those days supporting a family of six. We didn't have any option but to look for cash-saving options. Many people used to come to my mom to get the quota rice for us for a Rs5/10 cash. So my mom used to give them Rs 60 for 25 Kg rice. They go to the PDS and deliver the rice at home. Same case with Sugar, Kerosene, edible oils etc.,

How do you catch this?