[dragracer567]

Originally Posted by hondafanboy

I don't understand the need to do such comparisons. But then if not this then what will they write about ? I wonder if there was such comparisons or writings done on development / economy /aid etc. w.r.t to African countries etc.

On the contrary, comparisons are crucial to understand our present state of development or anything else for that matter. I just picked up this article because of the rude numbers that the hard statistics portray. Again as I said, we have a higher HDI than these countries but GDP per capita is a crucial (if inaccurate in many ways) indicator as well which we cannot brush aside because its inconvenient.

To use a car analogy, we say a BS4 Hyundai Verna 1.6 diesel is fast because it accelerates faster than a Ciaz or City diesel. If all the Verna's competitors were sub-7 second (0 - 100 km/hr) cars in the same segment, we would've have called Verna slow. Comparisons are very important and relevant.

It is quite evident and obvious that our development and economy has derailed massively after Covid struck. And we all are responsible for it, including the state and central government.

Our economy has been declining every quarter since atleast 2018 before it hit a wall during COVID. And we haven't made strides in social indicators (infant mortality, hunger index etc) either based on government reports.

But when it gets over ( and it will ), development and economy will again be back on the track , might be slow to start , but will pick up the speed as we move forward.

This is a very dangerous assumption to make. Growth is not a given and we are not exceptional. We are not destined to grow forever, growth is directly linked to the state of the political-economy and being stuck in a lower middle-income trap is a very real and scary possibility (just ask Brazil) if the complacency exists that growth in inevitable for India. The nation - both public and private sector (latter helped by removing unnecessary barriers) needs to work to ensure growth.

EDIT: There is a lot going for India, don't get me wrong. Our economy is very diversified and we have a stronger tertiary and tech sector compared to most other developing economies which generally helps sustain growth, but complacency can be dangerous.

[Ragavsr]

Originally Posted by dragracer567

I had a rude shock today morning Basically when Kenya supplied aid to India, there was rude (and almost racist) backlash on social media of our predicament for taking aid from an apparently 'impoverished' country.

This was always the fact and I am surprised it took so long for people to realize this. India has always been a poor place notwithstanding the rapid economic growth in last 3 decades which also happened in most parts of Africa.

People in India have a superiority complex despite being poor. Never mind the PM himself thinks the country is a rising superpower while the average per capita income is 2000 USD. People and the government take pride in being the 4th largest economy or whatever but that's a function of 1.3 billion population which is probably higher than all of Africa put together. That actually means nothing for the average Indian citizen. The quality of life and governance is actually not much different between both places.

Our economy is diversified because it has no other choice. Africa is rich in resources and they can really prosper if they keep their population in check unlike India where the population is now plateauing and any growth even if small will result in actual per capita income increase.

Originally Posted by hondafanboy

It is quite evident and obvious that our development and economy has derailed massively after Covid struck. And we all are responsible for it, including the state and central government.

Again it's not as if the country had a per capita income of 10k USD before the pandemic and crashed hard. Growth has been tepid since the start of the decade. Only real positive is there is stability unlike the Latin American countries which have high 10k USD + per capita but are plagued by a weak currency and massive inflation.

[hondafanboy]

Originally Posted by dragracer567

The nation - both public and private sector (latter helped by removing unnecessary barriers) needs to work to ensure growth.

I agree. I am not pinning my hope on any single government, public or private entity etc. has to be collective ,intentional and honest efforts.

[AZT]

Originally Posted by dragracer567

So, if any of us are tempted to demean any nation based on their perceived state of development, perhaps these data would convince you otherwise.

Good point. Another thing you'd like to read about is how GDP growth calculations themselves are skewed by countries to make themselves look better.

Last year there was lot of noise about how the economy of the United States, as represented by its gross domestic product (GDP), contracted by 32%, during April to June 2020. This was worse than India’s contraction of 23.9%. Goal being to make us look 'less bad'. The devil is always in the details though, posting an article that you may enjoy.

Summary is

The Indian comparison is a year on year one and not a comparison with the previous quarter. The US comparison is a quarter on quarter comparison which is then annualised.

If the US were to report the GDP growth/contraction in the same way as India, its GDP during April to June 2020 contracted by 9.1% in comparison to the GDP between April to June 2019. The Indian economy contracted by 23.9% during the same period. That’s the right comparison.

https://vivekkaul.com/2020/09/01/the...acted-by-23-9/

[AirbusCapt]

I always said we need to consider india as multiple countries and not a homogeneous mass. For example take a look at the data below:

GDP of Mumbai is $11830, Bangalore is $ 7110, in between are our other top 3/4 cities like Delhi, Kolkata, Hyderabad etc. All these figures below to atleast the second world economies if not the first world. Even our second rung cities (about 30/50 of them) would have GDP in excess of 5000 usd.

The problem lies in rural and semi rural India. Most of these areas especially in underdeveloped states may have a GDP of below 1000 USD leading to an overall miserable and third world GDP figure.

The growth of India lies in developing our villages and not our cities. Only when we can increase real farm incomes, stabilize jobs in rural areas, increase education, medical facilities and life expectancy can we look at actual growth. Only making shiny infrastructure in our top few cities will lead to increasing inequality, resentment and conflict.

A simple example would serve the purpose. Most of our fruits and vegetables we buy from supermarkets are NOT produced in India. Your Tomato may well be coming from Africa or Pakistan. The locally grown tomatoes will never reach your plate on lack of cold storage, processing and transport facilities. This perverse growth is precisely why the development never reaches rural India. Our entire view of development is lopsided, it begins and ends within a handful of cities.

[prajwalmr62]

Originally Posted by AirbusCapt

The locally grown tomatoes will never reach your plate on lack of cold storage, processing and transport facilities.

AFAIK, most of the food supplies you get in super markets are produced in India. The acquisition costs haven't gone up, but we do have lots of problem in mapping demand to supply itself. Majority of this is lost in this commotion, hence making import necessary.


I'm sorry for the rant below.
---

Indian farmers are riddled with so many problems.

1. No proper avenue for selling in small scale
2. Few players in buying segment, almost like no competition.
3. Storage facilities is not easily obtained by small scale farmers
4. Disruption due to monsoon, flood, etc.
5. Crop insurance is a joke for smaller players.

These points are very important because Indian farmers on average has 1-2 acres of farm land (around 0.4 hectare). Whereas global counterparts have around 1000 hectares. Indian farmers are poor, least educated, and absolutely have no clue what to grow to make money.

You might start saying APMC etc for fair value, but the money you get from selling is peanuts compared to actual cost of production. Let me give you an example of how much a farmer makes out of each produce (let's forget transport changes).

• 1 coconut for 3 - 5 INR, selling price 35 INR
• Tomatoes on lucky day 5 INR/Kg, selling price 10-20 INR/Kg
• Bananas 8-10/INR, selling price 30 INR/Kg

Nobody wants to lift this group up either.

• Governments: more uneducated - more votes
• Middlemen: less players - large profit
• Agri products: gets govt subsidies, farmer takes loan hoping to earn more. - no loss in short term
• Consumers: cannot care less

This is the Indian farmer's life cycle now.

Gets loan and grows something -> sells it with 5% margin at max -> pays off the loan ( has no money now) -> Take the loan again.

The above cycle doesn't cover capital investments. A coolie earning 500 INR per day is suddenly Richie Rich for this group. This money is not appreciating over years either, it is not even keeping it up with inflation. Yield has been stagnant for most of this decade, if not decreased. This is the case of half of the population of our country.

How do you expect this group to pay off for their children's education? How do you expect them to live a decent life? How do you expect them to get a better healthcare? How do you expect them to contribute to our GDP growth?

We should provide them the basic necessities for free or increase their earnings. We have done neither. Now you know why our governments bail out farmers year after year with tax payers money. And why farmers still commit suicide.

Our per capita income is never going to increase (at least in a meaningful way) if we do not take any action to improve 50% of our populations income in anyway.

---

India, is a farmer's country when you do the headcount, but not when you count the produce, land, revenue, or general well being of a farmer.

---

and again, sorry for the rant.

[V.Narayan]

Originally Posted by prajwalmr62

The acquisition costs haven't gone up, but we do have lots of problem in mapping demand to supply itself. Majority of this is lost in this commotion, hence making import necessary.
---snip---The above cycle doesn't cover capital investments. A coolie earning 500 INR per day is suddenly Richie Rich for this group. This money is not appreciating over years either, it is not even keeping it up with inflation. Yield has been stagnant for most of this decade, if not decreased. This is the case of half of the population of our country.----snip---Now you know why our governments bail out farmers year after year with tax payers money. And why farmers still commit suicide. India, is a farmer's country when you do the headcount, but not when you count the produce, land, revenue, or general well being of a farmer.

Dr. Ambedkar said it best, 70 years ago that the best thing we can do for the Indian farmer is to get him out of farming. And of course our population growth by over 100 crores between 1951 and now hasn't helped either.

[VKumar]

Note: These are my personal views, and I seek the suggestions and corrections, wherever felt; by the fellow members.

Gentlemen

When it comes to agriculture, since I am directly connected to it; would like to talk about what is good and what is bad over here. I will talk the perspective of a medium level farmer from West UP, holding around 10 hectares of land or 120 Bigha of land in local measurement unit.

Schemes from the Government (Not going deep, only the ones which are known to all):

• MSP - For your items like Wheat etc
• FRP - For cash crops like Sugarcane etc
• Kisan Credit Card - And UP Government in 2017 waived off the loans too, even the farmers who had paid it fully, they also got it reimbursed by the government. But in KCC, the farmers get the subsidized RoI only if the payments are done timely.

Example of Sugarcane:

• Place: Upper Ganga Basin
• Soil Type: Very fertile
• Water Availability: Excess
• Weight unit: Quintal (100 Kilogram)
• Land Size Measurement Unit: Bigha (Around 1000 yards)

Total Cost:
It consists of 2 costs:

• Sowing Cost
• Transportation cost

Sowing Cost:
This cost includes labour, diesel, fertilizer and cost of seed (which is produced in the farm itself). Where fertilizer is mostly taken by the farmers from their co-operative society, whose cost is deducted from their payments from Sugar mill itself at the end of the harvest, with an applicable rate of interest.

Including everything, the cost per bigha of land comes around ₹ 14000 bucks for the best quality produce, it may go slightly higher in the areas with low water table

Transportation Cost:
Farmers drop their sugarcane at collection centers located nearby, from here the Sugarcane is sent to the mills. For a quintal, they charge the farmers averaging around ₹ 0.66 per kilometer. If the Sugarcane is going to a mill that is 20 kilometers away, the transportation cost per quintal stands at ₹ 13.20 per quintal

Returns:
The average production I am talking about is of the district Muzaffarnagar, which is good in terms of productivity (Districts Baghpat and Shamli are exceptional), where you can easily achieve a harvest of around 79 quintals per bigha, which is the average taken by 3 biggest sugar mills of the district.

Declared FRP by UP Government: ₹ 310-325 per quintal, depending on quality, let's take ₹ 320 for all our calculations, as we have taken sowing cost for the best quality produce.

So, for a farmer who is sowing Sugarcane in say 50 bigha land out of the entire piece of land he owns. The Sugarcane production looks like this:
Total production @ 79 quintals per bigha: 3,950 quintals
Total sowing cost: ₹ 14,000 * 50 = ₹ 7,00,000
Total Transportation Cost: ₹ 13.20 * 3950 = ₹ 52,140

Total rough cost estimate stands around ₹ 7,52,140 for sowing and transporting Sugarcane in a 50 bigha piece of land

Total payout for farmer: ₹ 320 * 3950 = ₹ 12,64,000 (The cost part includes all the overhead costs)

So a farmer ends up saving somewhere around ₹ 5.12 lac from one season, but they receive this money in small installments from mills, at times, the delay may get as long as 1 year.

Now, there are other crops in other pieces of land, and the upper part of sugarcane plant is used as grass for cattle etc. Milk is normally the secondary source of income, along with wheat and rice. Overall, taking everything into account, farmer who is cultivating 10 hectares or 120 bigha of land in my region, ends up making an average income from the land at around 11,000 per bigha taking everything into account - only if the harvest is normal. Drought is never an issue in this area, excessive rainfall and hailstorms can cause serious damage to what crops though.

Where's the issue then?
The issue lies in the fact the the average land holding in Uttar Pradesh is not 10 hectares per farmer, it is 0.80 Hectares per farmer! And there goes the entire calculation don the drain!

The Opportunity?

• Matching the demand with supply. Just see, WTO has recently slammed our Government for providing export subsidy on Sugar - yes, we over produced in 2020!
• We still import over 60% of our oilseeds or edible oil ingredients

The income of farmers can be increased by only one method - education

• To increase the land holding per cultivator (Not owning farmer, but someone who owns some land, and has some on lease too) - you need decrease agricultural dependency of the youth. You need to send them out of the village to work and earn a better living, while a few left back in the village do work on the farmlands - this is the model that is working in the background for Punjab farmers. The person who owns 5 hectares, is cultivating 25; because there are few people left to cultivate. That will increase labour employment too, because you can't employ two equal sized land owners under one another, but you can send one to work in city and another can employ a few labourer as the cultivable land holding will be higher with one person now.
• More promotion to crops with higher commercial value
• Diversification to other business like milk production and distribution ,poultry etc, with their on land in place, farmers enjoy an advantage in these business

As V. Narayan Sir said, while quoting Dr. B. R. Ambedkar "The best thing one can do to the farmer is get 'em out of farming", while this can't be practically done keeping our National Food Security (universal) and even bigger 'National Food security Act, 2013' in mind (Government has to feed the poor, can't be done on imported ration). But an alteration in this statement makes it a fit for today's scenario "The best thing one can do to the farmer is get a majority of 'em out of farming, make them learn and add diversity in their life fabric by getting jobs outside or getting into other business". Everything has to co-exist, our entire economic system is quite fragile, and we can't afford to have any component of it collapse.

The population growth is good for farmers, but we need another set of modified green and white revolution now. There is a huge potential in oilseeds, organic farming, good quality milk is always in a shortage, but individually a single neta or a single society can't bring about the change. We have both tropical and temperate climate together in our landmass in South and North respectively, over dependence on a few crops needs to be cut and a few more are to be added - and that's where the Government's interference is necessary. Amul is a co-operative, but it's made by the Government, the Government, being the main mass mobilizer, only has to step in, there is a huge untapped potential in our primary sector - only if tapped properly.

[aashishnb]

My views

Originally Posted by vrprabhu

Paradox here is that both banks are offering LOWER interest for higher quantum of deposits - flush with money and don't want further liquidity?

IMO, this is a short-term phenomenon, probably driven by the liquidity boosting measures by government due to covid, which HAD caused a lot of surplus liquidity with businesses. Now when things start to move back to normal, the surplus liquidity gets re-deployed into business (working capital, etc.), and the larger deposit rates will again go back to higher than smaller deposits.

Basic economics - The cost to the bank, in terms of time of staff, paperwork, etc. is the largely similar for a Re.1 FD and a Re.100 cr. FD, and therefore they can afford to pay a higher interest on larger deposits.

Separately, a customer can definitely try & open multiple FDs, with multiple banks, of less than 2 cr. to get the higher interest!!

Originally Posted by VKumar

Gentlemen,

A few questions for the experts, pertaining to the current COVID situation.

We have left the practice of deficit financing by printing more money decades back. But isn't this the time when we shall go back to the same practice, to help increase the consumer expenditure?

Helicopter drop / Helicopter hoover, as recently suggested by a member of Kerala Assembly; 5% of GDP value to be done away as a helicopter drop.

Our healthcare sector needs a massive reform, it is proven at this point of time. But for that the government also needs to make massive investments, hence we need higher revenue receipts. So, isn't it the high time that the governing bodies shall go to some disruptive age old practices to deliver a massive policy stimulus?

We are already in some form of 'helicopter money' / 'stimulus', even though it may not be directly called so. The interest moratoriums that were given last year, lower interest rates & more importantly providing guidance that we expect to keep them low, waiving/reducing penalties on GST delays, etc. are in some form a 'stimulus'.

Originally Posted by Samurai

We all know people who lose their lunch when they hear the word socialism or just the name Bernie Sanders. That is mainly because people get triggered by the label, without really understanding what the word means in today's context. Instead they start thinking about communism. Which is actually antithetical these days, considering communist China itself is following capitalism and has more billionaires than any other democratic country. So communism has lost all connection with socialism. There is no point in pondering what Karl Marx thought in 19th century. He is irrelevant now.

What is the socialism that is defined by Bernie Sanders? We don't have to guess, he defined that in 2006 in an interview.

Originally Posted by Jeroen

Sadly, The republicans call this radical, wrong and dangerous.

Jeroen

Originally Posted by m8002?

The cold war period just equated these concepts : Democrazy = Capitalisam and Communism = Socialism while the reality is different.

Now, its difficult for many people to understand that a Democratic country can be socialist ( many European countries ? ) and Capitalism can thrive under Communists ( China? ).

Agree.
If one thinks of it on a very high level, as countries get richer, they tend to lean towards more 'socialistic' policies in a very macro sense, as compared to staying 'capitalistic' i.e. let the free markets decide everything. For e.g. policies such as:
1. Unemployment benefits
2. Universal free Healthcare / universal free education
3. Rental housing policy in Netherlands where city governments created a lot of rental housing (including in the rich areas and not just outside the city), and gives it to people at a 'lesser than market' rental, subject to meeting certain criteria. I saw a place where the LIG & HIG buildings are opposite each other on the same road and practically have the same brick exterior. I'm sure there would be other countries with similar projects.
4. Pension & social security schemes that are getting more elaborate
5. Estate taxes (in some sense penalizing the capitalistic who have accumulated wealth)

[smooth indian]

Originally Posted by dragracer567

Coming back to the Indian economy in terms of GDP per capita, I had a rude shock today morning triggered by this article (source). Basically when Kenya supplied aid to India, there was rude (and almost racist) backlash on social media of our predicament for taking aid from an apparently 'impoverished' country.

A lot of these esteemed "commentators" should brace themselves for an awakening because as of 2020, the Kenyan GDP per capita was higher than that of India. The Indian economy is supposed to pull ahead in 2021 by an insignificant $62 according to the IMF but that's not going to happen with the second wave and a prospective third wave with low vaccination numbers diminishing India's growth rate prospects for 2021 as well. Not just Kenya, about 20 African countries are ahead of India in terms of GDP per capita including Sub-Saharan African countries like Ghana, Cote d'Ivoire, Nigeria, Republic of Congo and Kenya. Infact, I was in for a ruder awakening when I realized that if Bihar was a nation, it would rank 184 out of 195 while UP would rank 172. These are appalling numbers to say the least!

Having being an international student in the US I have learnt not to underestimate people from not so well regarded countries. There are quite a few smart people Latin America and Africa. A country like Mexico which is known for its drug cartels, violent crime and poor farm laborers living in US/Canada still has a higher or comparable HDI than our best state Kerala.
All the countries which have managed to increase their per capita income have done so by making the path clear for economic activities like manufacturing, mining and infrastructural development. In India we often let our perceptions of our culture and propriety get in the way of genuine economic progress.

Originally Posted by AirbusCapt

The problem lies in rural and semi rural India. Most of these areas especially in underdeveloped states may have a GDP of below 1000 USD leading to an overall miserable and third world GDP figure.

The growth of India lies in developing our villages and not our cities. Only when we can increase real farm incomes, stabilize jobs in rural areas, increase education, medical facilities and life expectancy can we look at actual growth. Only making shiny infrastructure in our top few cities will lead to increasing inequality, resentment and conflict.

You will have to move a significant part of the metropolitan economy to the small district and tehsil towns especially those with 350-400 km of our tier 1/2 cities. When these towns see more manufacturing/services/inovation oriented industries coupled with improvement in their basic amenities (roads, water, waste-management, education, power e.t.c.) we will see increase in incomes and quality of life. It will also relieve some of the burden *of being economic engines) on our large cities.
Farming alone will not sustain the progress needed for the rural and semi-rural economy.

[v1p3r]

Originally Posted by V.Narayan

Dr. Ambedkar said it best, 70 years ago that the best thing we can do for the Indian farmer is to get him out of farming.

I will respectfully submit that if we had listened to the good doctor more through the ages, we wouldn't find ourselves in this mess. This country owes much of its decency to him, and to one Mr. VJ Patel.

[maddy42]

Well made points on farming here. Along side a lot of demands made here and outside the forum that farmers need to stop farming, i would like to ask what else can he do instead? Our jobs are not keeping a match to the number of people getting out of college, and other than the optimism in certain cities the situation is not so easy to transition without mentorship or guidance.

Certain points i would add here:

• Farming is expensive! Machinery and diesel are the two major costs after labor. Add to it yearly repair and maintenance costs.
• Farming incomes has lagged or stagnated for decades. Unless farmers move up the value chain, there is no way that revenue can be improved. Marketing is a weak subject for the farmer.
• A lot of farmers are used by politicians as their vote bank. Thats why the loan waiver, 0% loans, fertilizer subsidies are given as freebies to ensure that the farmer keeps voting. By keeping him poor and wanting the politico gets voted back.
• APMC are a bane! The margin a trader makes in a day is higher than the cost of the goods sold by the farmer after growing it for a year.
• Loan cycle is a constant, and one event like a wedding or medical expense can dig a deeper hole.
• Farmers assets are not easily monetisable. His home, his farm is not monetisable at the same percentage like a citys apartment.
• Civil disputes and land disputes take more than ones lifetime to settle. My neighbor has a 14 acre plot on dispute since i was born! The plots uncultivated and the man is in his 60s now.

Buying farm land, depending on the area is becoming expensive. There will be no feasible return for your investment these days unless you look at it as a real estate deal.

Small farmers have it the hardest. Under 5 acres is just sustenance in majority of the cases.

Unless a lot of rules change in the agriculture sector, things wont change and will just worsen.

Maddy

[PGA]

The point of moving farmers especially small and marginal ones away from farming has been made a number of times by a number of eminent people. But the change hasn't happened.

The reasons espoused are purely financial in nature and in lieu options proposed are that of unskilled labourers.

A farmer, big or small, is master of the land he owns. There is a certain pride and free will attached to the profession which is very hard to experience anywhere else.. There is generational attachment to the land, so even in times of extreme hardship a farmer sticks to his land. Afterall you don't sell family jewels for life of servitude.

Beside what has been proposed is a by product of last century's industrial farming practices. Times are evolving and detrimental impact of industrial farming is coming to fore. I see a trickle of young blood coming back to the farms loaded with education and assisted by internet to farm in more holistic and nature friendly way and marketing their produce themselves. I feel the age of small farmer may be just around the bend.

Ronaldo has just shown us the way

https://twitter.com/guardian_sport/s...237411331?s=19

[maddy42]

Originally Posted by PGA

The point of moving farmers especially small and marginal ones away from farming has been made a number of times by a number of eminent people. But the change hasn't happened.

A farmer, big or small, is master of the land he owns. There is a certain pride and free will attached to the profession which is very hard to experience anywhere else.. There is generational attachment to the land, so even in times of extreme hardship a farmer sticks to his land. Afterall you don't sell family jewels for life of servitude.

Ronaldo has just shown us the way

https://twitter.com/guardian_sport/s...237411331?s=19

True! Once you sell its harder to get it back. Better education access and health care to the rural boys and especially girls will go a long way in getting more professionals amongs kids of farmers.

Heck even in this day and age we have people in my district die on the way to hospitals in Mysore.

Maddy

[Samurai]

Originally Posted by maddy42

Unless a lot of rules change in the agriculture sector, things wont change and will just worsen.

Being from traditionally agricultural family, most of my extended family including myself have inherited agricultural land, all below 5 acres after the dividing. However, not one of us are doing agriculture for a living. The economics simply doesn't make sense. So all those fertile land is lying vacant. Everyone is hoping for some big company to come and acquire the land for industrial use.