[Samurai]

Guys, the discussion is veering too much away from economics. - Support Team

[PGA]

Originally Posted by SmartCat

Only China (no political freedom, but strong economy) & India (relatively robust political freedom, but weak economy) seem to be an exception to the above "rule".

I think its always combination of multiple factors and their interlinked behaviour that is responsible for a particular outcome. Political economy, is a term denoted to express relationship of economy and public policy. When we say we have political freedom it is quite meaningless unless we conjoin it with public policy and that has always been lagging with us except for a small period, say from 1991 -2008 that too with some hiccups. China has had very strong Political Economy starting from early 70's, nations ravaged by WW2 built up their nations on the strength of their public policy. I think we started great in 1947 but quickly lost our way due to historical reasons of being under subjugation for a long period of time.

I feel the only glue that keeps human kind on the path of well being and progress is economic growth. Bereft of this we revert to our civilisational baggage of caste, creed, race, religion et al.

Another aspect that is often overlooked is conflict resolution and and the role of judiciary in the economic development. Theoretically one may conceive the best public policy but human nature is such that we will quickly adapt it to personal or clan advantage, to keep delivery on even keel is the role of judicial system.

Today economically advanced nations have moved civilisationally ahead as well, almost in all aspects. The direction these nations are taking to empower their citizens with capabilities makes me believe in theory of Yuval Noah Hariri of super humans and minions, they are in the process of leaving behind the notions of material wealth and possessions as measures of economic prosperity but are working on the paradigm of innovation and knowledge as the new basis of progress, Israel, Singapore and Taiwan being classic examples to prove the point but US, China not being left behind. The only countries which may keep their flags still flying in the next century on old models of economic progress will be Russia and Australia and maybe Brazil because the nature has bestowed them with that much abundance.

[Samurai]

Originally Posted by extreme_torque

Is it the fault of the workers who werent paid by the contractor or the fault of the government who does not have labour protection laws?

https://timesofindia.indiatimes.com/...w/79712635.cms

India does have labour protection laws, and so did Apple for their suppliers. Turns out it was the Taiwanese company and their contractors at fault.

Apple has a strict supplier code of conduct and follows up on any reports of violations. In November, Apple Inc had suspended new business with Pegatron after labour violations were reported. In 2019, it interviewed more than 52,000 supplier employees as part of its supplier assessments.

Apple, in its supplier code of conduct, states that suppliers must meet all legal requirements relating to wages and benefits, including paying accurate wages in a timely manner.

https://www.thenewsminute.com/articl...res-why-139723

https://www.thenewsminute.com/articl...factory-139735

[Samurai]

Last time I checked, Bloomberg was not a socialist rag. Yet they have published an article that shows Amazon is depressing wages wherever it goes. The data is taken from the US government labor statistics.

"Many Amazon warehouse employees struggle to pay the bills, and more than 4,000 employees are on food stamps in nine states studied by the U.S. Government Accountability Office. Only Walmart, McDonald’s and two dollar-store chains have more workers requiring such assistance, according to the report, which said 70% of recipients work full-time. As Amazon opens U.S. warehouses at the rate of about one a day, it’s transforming the logistics industry from a career destination with the promise of middle-class wages into entry-level work that’s just a notch above being a burger flipper or convenience store cashier."

https://www.bloomberg.com/news/featu...oyees-homeless

[Cessna182]

A company I happen to work closely with recently set up a factory in Singapore of all places. I wondered why. A manager I know said that the infrastructure, efficient government with technically educated (not IAS type babus) bureaucrats and very open trade routes encouraged them to set up there. Labor costs are slightly higher but they are less than 10 percent of the expenses of any well run company. Land costs are higher but the overall environment is worth it. Most importantly, you won't have a tax collector IRS babu showing some 15 year old legislation applied retrospectively, like they do in India. I struggle to understand why the media celebrates these bureaucrats qualifying the UPSC exam, because thet are literally the speed breakers for India.

India could grow a lot more if only we removed these babu created fiefdoms. According to a recent YouTube video, It takes more procedures to create a business in India as a citizen than in Canada as a visitor.

Our government employees are overpopulated in low priority departments like administration, while IITs and engineering colleges and research institutes have thousands of vacant faculty and scientist seats. We need to get rid of this administrative class of employees to grow even a bit.

Countries like Vietnam export more than India- a statistic that shocked me when I learnt it yesterday. All this atmanirbhar talk is just dragging us back to the babu raj of the 60s,70s and 80s.

[tsk1979]

Originally Posted by Samurai

Last time I checked, Bloomberg was not a socialist rag. Yet they have published an article that shows Amazon is depressing wages wherever it goes. The data is taken from the US government labor statistics.

"Many Amazon warehouse employees struggle to pay the bills, and more than 4,000 employees are on food stamps in nine states studied by the U.S. Government Accountability Office. Only Walmart, McDonald’s and two dollar-store chains have more workers requiring such assistance, according to the report, which said 70% of recipients work full-time. As Amazon opens U.S. warehouses at the rate of about one a day, it’s transforming the logistics industry from a career destination with the promise of middle-class wages into entry-level work that’s just a notch above being a burger flipper or convenience store cashier."

https://www.bloomberg.com/news/featu...oyees-homeless

Well, they are writing against socialism. The socialism where we are paying for somebody else's wages.

[AltoLXI]

Originally Posted by Samurai

So this Taiwanese company can't act like innocent bystanders.

The company is now under probation and VP sacked.

Apple, which has been dragged into the melee, seems to have take a serious view of the entire episode. The Apple statement said it has “placed Wistron on probation and they will not receive any new business from Apple before they complete corrective actions”. The statement added that Apple employees, along with independent auditors, will monitor their progress. “Our main objective is to make sure all the workers are treated with dignity and respect, and fully compensated promptly.”

Link

Was this a classic case of scalability issue, where they bit more than they could chew, combined with taking advantage of lax labor laws?

Just before the clashes, Wistron had 1,343 full-time employees and 8,483 contract workers, according to a report prepared by the Karnataka labour department’s Kolar circle office after the violence. The report also alleged that Wistron didn’t maintain attendance and salary records.

The rapid expansion stretched the company’s systems and sapped the bandwidth of its management team, one of the people said. Its employee access system soon foundered, leaving it with patchy attendance records, delaying wages and overtime pay. Wistron’s human resource team—comprising about three people—just couldn’t cope up with the workers’ grievances.

Link

[Cessna182]

Let's get ready for more expensive electronics, auto parts etc. The government is putting up further tariffs against chinese imports, many of which have no substitutes in India.

https://www.telegraphindia.com/amp/b...rom%20%251%24s

Almost every PhD educated economist is recommending that India become more open and that barriers are not worth it. However, when fake nationalism ignites the mind, logic and consequences of abandoning it don't matter anymore.

I can't believe that despite having no semiconductor fab, not one LiPo battery unit, not a single facility to manufacture circuit boards except a few companies that deal with academic institutes, the government believes that banning and putting tariffs on imports is the way forward. This is like the IAS-customs-IRS babudom reigning supreme once again like the pre-1991 era.

The saddest part is that consumers like us will habe to pay higher for the same products and this will drive consumption down.

[SmartCat]

Originally Posted by Cessna182

Almost every PhD educated economist is recommending that India become more open and that barriers are not worth it. However, when fake nationalism ignites the mind, logic and consequences of abandoning it don't matter anymore.

I don't think this move has anything to do with Economics or Nationalism. Think Geopolitics.

The current Govt (meaning top leadership) thought economic inter-dependency via improved trade relations with China will buy peace & stability on the border. Their assumption was wrong.

So we are now just reversing the process.

[vrprabhu]

This may be the fact / true -

Originally Posted by SmartCat

.... current Govt (meaning top leadership) thought economic inter-dependency via improved trade relations with China will buy peace & stability on the border. Their assumption was wrong...

But, isn't this point also valid?

Originally Posted by Cessna182

...I can't believe that despite having no semiconductor fab, not one LiPo battery unit, not a single facility to manufacture circuit boards except a few companies that deal with academic institutes, the government believes that banning and putting tariffs on imports is the way forward. This is like the IAS-customs-IRS babudom reigning supreme once again like the pre-1991 era....

I guess (business) people follow the 'make' or 'buy' principle.

So unless alternate supplies are available at the same price or marginally higher, the increase in cost due to re-introduction of duties will get passed on to the consumer.

And, if the Government increases the duties, don't they get additional revenue? Will they use it to subsidise domestic production / industries?

[SmartCat]

Originally Posted by vrprabhu

And, if the Government increases the duties, don't they get additional revenue? Will they use it to subsidise domestic production / industries?

Yes, it is called "Production Linked Incentive" or PLI Scheme (dated Nov 2020)



Scroll down the page for details:
https://pib.gov.in/PressReleasePage.aspx?PRID=1671912

[Cessna182]

I am totally supporting indigenous products. I don't recall the last time we bought a foreign branded milk pack, cheese, fruit juice, simple appliance like irons, RO machine etc. But how can India make a comparably priced laptop RAM immediately? If you start a semicon factory today it takes 2 years to reach peak output because the processes are so complex. How can we put an import duty on solar lights when most of our sellers are basically importers (the few solar lights made in India are just assembled here. You should visit SNEC which is the largest solar expo globally to see how many Indian traders are paying attendees). How can we restrict imports of laptop batteries?

I tried to buy a table lamp for reading at night last year from a local shop and the made in India ones were exactly the same from 20 years ago. Same design, same problems like the paint fading off. The china made ones were with LEDs and a fiber body that would not rust. And they were cheaper. What would you buy if you had just Rs.500? Why did the Indian maker not do any sort of innovation in 20 years?

You could check the price history for common basic electronics on Amazon.in. Each such duty hike bumps up the prices slightly. It would be interesting to see how these sellers sustain themselves when their existing stocks run out.

Off topic- the government could not indigenize its own fleet of vehicles. Babus and legislative members roam around in Japanese cars and often EU ones. Why not a Mahindra Alturas or Ertiga or Harrier?

Decoupling is possible when you have capabilities or are at least building them. I am familiar with the the renewable energy industry and not 1 factory has come up here in the last 5 years that makes solar cells that are comparable to global peers and priced the same. The last I heard the domestic factories operate at less than 50 percent capacity. There has to be a push from the government to get people who are well trained back to India to make things work- that's how the Chinese did it. But is that push there? I don't see that in any of these silicon and semiconductor related sectors which are the pillars of technological independence. The few capable PhDs with experience in semiconductors are desperate to leave India and the ones abroad are so reluctant to return. We cannot become atmanirbhar unless we attract the right talent and provide them with resources to develop the technology, and even that will take at least a dozen years if started now.

[v1p3r]

Originally Posted by Cessna182

I am totally supporting indigenous products. I don't recall the last time we bought a foreign branded milk pack, cheese, fruit juice, simple appliance like irons, RO machine etc.

Danone, Nestle, Tropicana, Philips - these are all international brands. Milk is still regulated btw, unless I'm mistaken.

Originally Posted by Cessna182

Decoupling is possible when you have capabilities or are at least building them. I am familiar with the the renewable energy industry and not 1 factory has come up here in the last 5 years that makes solar cells that are comparable to global peers and priced the same. The last I heard the domestic factories operate at less than 50 percent capacity. There has to be a push from the government to get people who are well trained back to India to make things work- that's how the Chinese did it. But is that push there? I don't see that in any of these silicon and semiconductor related sectors which are the pillars of technological independence. The few capable PhDs with experience in semiconductors are desperate to leave India and the ones abroad are so reluctant to return. We cannot become atmanirbhar unless we attract the right talent and provide them with resources to develop the technology, and even that will take at least a dozen years if started now.

Boss, we have been saying this for 15 years and we have gotten nowhere. Let's face it, India is a nation of traders and shopkeepers. We have not built a single world-class engineering product from this country in the last 70 years, with the sole exception of our missile and space programmes. Further, we show no inclination to build such a capability. Our best engineers (and our education system is another story) are intent on making money building bookkeeping apps or user interfaces for scammy educational apps, or becoming financial analysts. The less said about government encouragement and incentives, the better.

Let us just be happy with importing stuff. There is no great shame in it.

[Samurai]

Originally Posted by Cessna182

Why did the Indian maker not do any sort of innovation in 20 years?

Need is the mother of all innovation. If cheap Chinese products are available, why would anyone buy more expensive local products? This is a chicken and egg problem.

There is also branding issue, Indians typically pay higher for known brands over cheaper local brands. It is known as "you can't go wrong with IBM" syndrome.

About 12 years ago our company developed a video conferencing solution for enterprises as a cheaper alternative for Polycom, CISCO & Tandberg. It was built on Arch-Linux, didn't need custom servers and was integrated with advanced conferencing cameras. Guess how many people bought it? No one. We used it our own internal conferences for 5 years and finally retired it. Folks didn't even want to try it for free, after we spent $50K on marketing efforts.

This debacle happened because our company didn't have a proper marketing/sales division which could have predicted this outcome before the product was developed. So we found out the hard and expensive way.

Most companies won't build a product unless there is reasonable basis for profit. That is why India doesn't have strong products.

[Samurai]

A new study report suggests that sun rises in the east...

Oops, I meant to say:

Large tax cuts for the rich don't lead to economic growth and employment but instead cause higher income inequality, a new study that examined tax cuts over 50 years suggested.

https://twitter.com/business/status/...104770?lang=en