[Sutripta]

^^^
Actually 'to what purpose' is not answered beyond the 'Modi wanted it'. Why did he want it? Gamed or not, has it helped us in any way? Or is it only for internal optics:- when uncomfortable questions are raised (a very rare occurrence!), can be deflected by 'figures' from an international body?

Sutripta

[v1p3r]

Originally Posted by Sutripta

Or is it only for internal optics:- when uncomfortable questions are raised (a very rare occurrence!), can be deflected by 'figures' from an international body?

You've answered your own question, my good sir.

[Sutripta]

^^^
Collateral benefit I would think. Unlikely to be the primary reason. Unless it was identified as low hanging fruit. On the domestic image front, the PM does not need it. I mean it doesn't hurt, but not worth spending effort on.
Also using it as shield from domestic criticism doesn't add up. Because as far as the economy went, living in denial does not come close to describing it. They actually believed they were going great guns.

Something more to it. What interests me more than the 'what' and 'how' is the 'why'.

Sutripta

[srini1785]

Last year, our company participated in an industrial exhibition at the BIEC , Tumkur road in bangalore. The focus industry being dairy and farming, which,is only tangential market to us. What surprised me was the dis proportionately large Chinese delegation. They had an entire hall to themselves. All the stalls had a nice looking lady receptionist who welcomed you with folded hands (they did know a single word : "Namaste"), TV presentation displays ( all in Chinese) and , for the serious businessmen, an english/chinese translator sitting back in mainland who did the translation via video conferencing. My visit was only a casual one just to see how they operate. However , serious businessmen friend of mine who did check their prices was aghast at the quotes he received.

Sample this , a 50L milk can ( plastic) was available at 250.00 while the minimum retail price of the same from an indian vendor is around 1500.00. There is a catch though. They were quoting a container rate i.e around 250 -300 cans minimum. Even at a 50% tax rate on import, a trader would still make a decent buck . My friend suggested that they were ready to go lower if the order exceeded a certain value. So now you can do the math and calculate the profits that one can make by this venture. Further queries revealed that the basic resin which is used to make these cans is also produced in china. Our manufacturers who make these cans for local market also depend on the chinese for that resin. So you see its a easy thing to shout " Be vocal for local" and do lip service to industry without much understanding the intricacies of supply chain management , marketing and economy of scale.

Oh btw, there was a large Tibetan group outside the venue who were shouting " Down with china" but they did not seem to mind.

[arzala]

Originally Posted by v1p3r

All this talk of being pessimistic and looking to lure businesses is likely to come from people who have never had to set up a business in India. If you compare the ease of setting up a business in India vs China vs a western country (as I have), the truth should become self evident.

I second this opinion, being in ITES industry, I have traveled many countries and met people from different culture and background.

No matter how much we try to be patriotic and try to keep reputation of our country as high (through food, tourism, IT), reality is that West always tells us that "Indians are very good, but India is not good".

[dragracer567]

Here's the problem with this narrative. Since atleast 2014, India has been trying to lure foreign companies with some success here and there but largely not much has changed. The share of manufacturing in the GDP has actually declined slightly since 2014 which means services is still growing faster than either manufacturing or agriculture.

The thing about China is that it has developed skills and supply chains which just cannot be replicated in other countries, it takes decades to develop these and the fact remains that the China is still more efficient to conduct business in thanks to their political system, so authoritarian countries like Thailand and Vietnam will find it easier to replicate China's policies than countries like India.

Another problem is the regional variation in India. Only a handful of states - Maharashtra, Gujarat, Tamil Nadu, Telangana and Karnataka contain most of the skilled labour and infrastructure to conduct good business while the states which are reaping the demographic dividend such as UP and Bihar just don't have the ability to attract business due to law and order, infrastructure, unskilled labour etc. Take this, the GDP of Tamil Nadu is slightly higher than UP despite having less than 1/3rd the population (and shrinking).

Worst of all, India needs to fix its land and labour reforms. This is a politically controversial and both the UPA and NDA governments have been very reluctant to even discuss this but I hope this crisis will give them the impetus for change.

Finally, self-reliance is great but I really hope the government doesn't aim to achieve this by bringing the license raj back because this will halt all the progress we made since 1991. I am a sucker for global trade and I believe that Indian companies have benefited more from global trade rather than been hurt from it but that said, we just cannot be reliant on China who aren't playing by the rules by shutting down their market while forcing other countries to open up.

[AWD]

So I was on a phone call with my CA the other day, the fellow was all gaga over the reforms announced & suggested me to invest heavily in the market as its going to be a catapulting growth story post Covid. I could not simply fathom what he was saying as this is the same person who got after me to invest in DHFL just before it went bust! Ofcourse good sense prevailed & I got saved of the agony. Apart from a few more bad investing ideas he gave me in the past, there was no reason to believe in what he was saying. He was over-optimistic about businesses from China making a beeline for Indian shores, again something I let go off from the other ear!

Until we fix Infrastructure, Labour reforms, rampant corruption(without which not even a leaf moves), etc how can we be so buoyant that business will make a shift to India! Political interferences not withstanding. There are far too many internal problems which need fixing before we start expecting companies from outside coming in. Religious/communal harmony is another important aspect we need to work on.

[Tucker48]

How did China became a factory of the world?
1. Cheap labour
2. Big population.
3. Promise to become an open market.
4. China Russia rivalry.
Western world works under USA's leadership (arguably).
India should have been a first choice for USA to outsource it's manufacturing as USA has been a champion of democracy, time and again interfering in other countries affairs either to restore or promote democracy. But Indo-Russia relations didn't help and of course we didn't appease Americans like the Chinese did.

Infrastructure in China was not in good shape just like India but still companies set up their base in China. Infrastructure in China has become world class only in last 10-15 years or so. But most of the low cost manufacturing units were set up before that. However, the only real advantage they had were labour laws(or lack of it) and prisoners making products for use in developed countries.

If the govt is business minded then of course there are ways for India to become a factory of the world but having said that Indians won't tolerate a business minded govt, so the govt has to create a balance in creating opportunities for businesses and offering a better life to it's citizens. Only clever people with strong will in the govt can achieve that balance with fruitful results.

Regarding companies trying to shift their base, they are simply going for bargain hunting with different countries with tax breaks,cheap land etc. What better infrastructure do Vietnam etc offer?
A company setting up in Tamil Nadu for exports doesn't need infrastructure in Kashmir to work. There is no dearth of ports in India. Why companies need access to hinterland if they are comparing India to Vietnam? They can easily cater to population 10X of Vietnam with similar infrastructure. And if companies are looking for bonded labour, then we don't need those companies in India.

Crony capitalism and bureaucratic red tape is prevalent everywhere, perhaps there was more red tape in India which is going down to world standards.

By the way, India has always been a poor malnourished kid for the west so it's quite difficult for them to accept that there has been some change. Western media will always portray that. Rating agencies do the same as well. With India's debt to GDP ratio less than 70%, we still have a poor rating while Japan at 250%, USA more than 100% have very good rating. That's why Modi in his recent address clearly hinted that no one will help India, only Indians will have to help themselves. There is clearly a bias against India and always has been but fortunately with Indians becoming CEO's of top MNCs, US-China trade rivalry and more lately of this virus, there has been some shift.

[arzala]

Because of prolonged lock-down, I fear effect will be actually reverse i.e. "Replace India with China" because China has already resumed while India is still planning to open properly. I fear that whatever is left with us, will also be moved to China.

[Tucker48]

Originally Posted by mxx

Just last year Amazon and Flipkart-Walmart was hit by sudden policy changes putting them at a disadvantage. Now was this because of CIAT or because another big Indian conglomerate is set to launch their ecommerce platform is anyone guess. Everyone is watching this.
Why would anyone come here?

Amazon is facing a lawsuit in USA to the level that it might even be disintegrated just like standard oil approximately a century ago.
What Amazon/Flipkart did was crony capitalism at its best.
Being a marketplace means a facilitator between buyers and sellers.
How is a marketplace fair when it sells its own products on its platform that too copying the best selling products of other retailers on their platform and promoting their own products over theirs. Big brands will not feel any effect but small brands will die for sure.
We don't need companies like them in India. It's just not fair!

[ramzsys]

The degree of pessimism in each of these non-automotive threads in this forum is astounding.

Why even live, reproduce and work all day to accumulate the bank guaranteed papers in a country that seem to have no future?

[Nissan1180]

Originally Posted by ramzsys

The degree of pessimism in each of these non-automotive threads in this forum is astounding.

Why even live, reproduce and work all day to accumulate the bank guaranteed papers in a country that seem to have no future?

No one stating facts here is being pessimistic. India does not have a good export infrastructure. You can count the number of ports on our exceptionally long coastline to get that clarity.

India's problem in the recent past has been its internal demand. Less than 10% of the population drives all consumer expenditure. That too is threatened now.

Making safety, minimum wage laws unnecessary may entice some small scale hole-in-the-wall type businesses, but most respectable corporates won't even bother about this legislation change, because their own manufacturing safety regulations are far ahead of what the government mandates because they don't want to suffer the consequence of any accident. In any case, labor accounts for less than 5% of the expenses of a well run company. No good company would stop investing because of "complicated" labor laws.

India's issue is with respect to infrastructure, bureaucracy and internal demand. None of that is being addressed by this government. Instead of streamlining the IAS babudom, they have steadily gained more power while the qualified engineers, teachers, doctors, nurses etc. employed by the public sector got a raw deal.

If the government was so serious about self reliance, they could empower PSUs like BHEL etc to explore making silicon for circuits in India. Correct me if I am wrong, but electronics is the biggest non-defense import after oil. The government should impose a surcharge on Chinese brands selling in India and give a tax break to the fledgling Indian brands.

[400notout]

Originally Posted by ramzsys

The degree of pessimism in each of these non-automotive threads in this forum is astounding.

Why even live, reproduce and work all day to accumulate the bank guaranteed papers in a country that seem to have no future?

Well the line between reality and pessimism is quite thin here, hence your observation. When you read the reality aloud it'll sound pessimistic but believe me you won't survive a day inthis place without positivity. It's a different matter whether it's induced by a content life or basic survival instinct.

Life here is tough. Positivity depends on whether your selling or buying. Reality is simple, if I'm providing my services I'd better be ready to work more and get paid less. I do that with a smile on my face because if I don't , someone else will, my positivity works, at least for my employer. Doing business means keep gaming the system, compliances are meant to be compromised. Just take a look around the streets you walk, all retail stores violate municipality norms every hour by encroaching spaces outside their store. Hawkers risk fines and destruction or their items to sell their wares in whatever corner they can find. They scram when they see municipality seize vehicles on patrol only to be back next day, such positivity!

Ask Pvt sector employees on what overtime is, and they'll appreciate your sense of humour. We laugh our rights and privileges away because expecting them would only take us away from the dose of positivity required to survive.

If India was anywhere close to China as an alternative, I'll bet most of the companies would dive to India to revel in the positivity brimming like our morning teas. But they don't. We do have whatever could come in the form of IT, BPOs and KPOs and few other areas.

To be blunt India does not have the work culture required to get the job done efficiently by China, and yes it does not go well with our patriotic ego. So we do what we do best, give spiritual gyan, refer mythology to pamper our ego, blame others ( previous govts, invaders, British) for our failures and shortcomings. Tell lies and more lies.

[V.Narayan]

Normally they say old men get pessimistic about the 'good old days'. But at least on Team BHP, on matters of economics, I find the young members pessimistic about the country, its economy and the their future. It is almost fashionable to gripe. At 60 I assume 99.999% of members of Team BHP are younger. Allow me to share my perspective. Each can draw his/her own conclusions.

When I first started to look for a job 38 years ago our GDP was $154 billion. Today ( ie 2019) it is $2.97 trillion an increase of a little over 19X in $ terms. With a better bureaucracy, less dishonest private sector, bolder reforms, better institutional building and education & training reforms it could have been $3.7 or $3.9 trillion but I doubt it could have done better than that while still retaining a democratic and federal structure. The sheer complexity of India, the federation of States, the 22 languages, the 9 religions and the hundreds of other diversity factors combined with a colourful functioning democracy and our 1.3 billion people having 2.6 billion views on each subject makes imitating China an impossibility. I'll come to that in a minute. But first let's look at four other large emerging economies/nations and see where we stand.

On a subject fraught with emotions let's look at facts. Mexico, GDP in 1982 = $218 billion. In 2019, $1.24 trillion i.e. a 5.6X growth. Brazil, GDP in 1982 = $186 billion. In 2019, $1.96 trillion i.e. a 11X growth. Indonesia, GDP in 1982 = $114 billion. In 2019, $1.1 trillion i.e. 10X growth. I am not making a comparison with South Africa or Russia as they are way behind on the growth story.

So while it is a happy past time to curse India, curse the bureaucracy {true confession, I love doing this}, run ourselves down, every once in a while we may want to cut ourselves some slack. Are things even half way perfect - no they are not. Can they get better; my take? - yes they will and they have been bit by bit all these 38 not so long years.

Coming to China. What China has achieved in terms of economic growth is a once in 5000 year achievement. In th elast 5000 years history has not seen anything like it. We are whistling in the wind trying to forever compare ourselves. Better to compare ourselves with what we were last year and make an incremental improvement this year and keep going step by step.

We don't have the same style of Government, or the vision or the people. Let's talk about people, you and me, people like us. For example, firstly, this conversation on social media could not happen in China. Secondly we have just expressed our anguish over the plight of lakhs of labourers walking home. In China they raze entire slum areas housing lakhs and forcefully shift them away without a whimper, without it making th enews and without you & me daring to express ourselves. China is not just the top grade infrastructure of Shanghai. It is also a world of the Xinjiang Re-education Camps and the world's largest network of face recognition. Are we willing to live in that regime. In India, we the upper classes may condemn those faceless bureaucrats for holding our country behind compared to China. But are we, the upper classes, willing to live without our freedoms, our fundamental rights, our decision to not adopt Aarogya Setu {PS: I am not in favour of it}? Are you willing to head a factory manned by villagers who work on terms only slightly better than bonded labour?

India needs reforms. We all know that. It has come at a steady trickle for these last 4 decades and regardless of which Govt is in power it will, I believe, continue for many years.

[Sutripta]

^^^
Interesting comparison with other countries. Could we do a slightly more detailed (both wider and deeper) analysis? esp
Compared with the smaller Pacific rim economies.
Not just GDP but per capita income, adjusted for PPP.
And in our case graph it across various eras - pre lib, post lib till UPA1, UPA1, UPA2, NaMo1, NaMo2.

Now that we have 'strong leadership', and likely to have that for some time, what trajectory do you see, both for our economy and our socio-political system,

Sutripta