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incredible india growth story 



Even though the world has just discovered it, the India growth story is not new. It has been going on for 25 years old
 
Tags:  india  growth 
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Published:  August 11, 2007
 
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Comments:
plicker Friendly Ghost (7 months ago)
(-Continued.. Part 3 or 3)

Many industrial activities are environmentally and socially subsidized to keep them economically profitable. Let us lobby governments to knock off that subsidy and see how many activities remain sustainable!

I propose peaceful demonstrations to compel industries to self-regulate, and legislators to pass laws:

Small groups of citizens shall collect the branded packaging material of various manufacturers from the environment, and delivering them in large bundles every week to their corporate offices. It belongs to them, right? So let them have it back!

A peaceful demonstration like this, sustained over some weeks, would make a powerful statement. I think this will make a powerful media impact as well… and thereby, an impact on the consciousness of people.

This would be the first step to making changes happen. Citizens, industry and government must first be made to acknowledge that there is a problem; then viable solutions will begin to emerge.

What say, fellow-citizens? I would appreciate your detailed responses to this idea.

Those who wish to join me in peaceful social action (as described) are urged to email me at friendlyghost.kk@gmail.com

Warmly,
Krish

http://friendlyghost.rediffiland.com
http://globalwarming.rediffiland.com

plicker Friendly Ghost (7 months ago)
(-continued.. part 2 of 3)

We should mobilize citizens to demand legislation that every manufacturer must repurchase/collect and recycle as many tonnes of raw material as he uses on a week-by-week basis. For example, if a mineral-water manufacturer uses ten tonnes of plastics per week to manufacture bottles, he MUST buy back ten tonnes of plastic scrap and safely recycle it.

Now think for a moment about used automobiles. Used cars and scooters in India are sold as second-hand vehicles, and then third-hand, fourth-hand. A second-hand vehicle may go from a metropolis to a small town or village. It keeps going further and further into the interiors as it ages, as its condition deteriorates and its market price dwindles. And then?

And then it is sometimes sold to a garage at a throwaway price, and this garage may salvage spare parts from it. ut what remains of this vehicle, including worn-out tyres, may lie around rusting and gathering dust for years and years on some deserted road. The tyres, when they are often burnt in winter for warmth, releasing black, acrid smoke and carcinogenic chemicals into the atmosphere.

Or it lies as a rusting eyesore in some building compound for many years as the last owner loses all motivation to either repair it or sell it.

Thus, every automobile manufacturer sells a product that turns into many hundred tonnes of junk — assorted metal, plastic, glass and rubber junk — after 6-8 years. They end up littering the beautiful countryside with this junk. Is this socially acceptable behaviour?

If one looks for solutions, they are not difficult to find. Legislation and regulations are the answer.

Automobile manufacturers must be required by law to buy back that many tonnes of metals, plastics, glass etc every week, and find ways to recycle them. The cost may be met by raising the market price of their product… but the responsibility to make the recycling activity happen MUST be fixed on the manufacturer of every product.

The same applies to tyres, batteries, plastic goods, newspapers, textiles, chemicals, auto-lubricant oils, etc. The list is long.

It is possible that this will make some manufacturing and marketing processes unviable. If so, this would mean that these economic activities were unviable in the first place, and were sustainable only by passing on hidden costs to the environment, to society and to consumers! Such activities must necessarily come to an end.

(-more-)
plicker Friendly Ghost (7 months ago)
While one feels great about the India Growth Story, there is a hidden downside: social and environmental costs are being quietly passed on, and frankly, society and environment are getting saturated.

An important social principle is violated by many manufacturing activities: While engaged in a profit-making activity, one must not leave a mess behind for the rest of society to clean up.

This principle can easily be understood as common decency. If I come to your house as a salesman in order to market something, I must clean up any mess that I make while selling my product.

But this principle is continually breached by manufacturers and marketers on a large scale in our country, and nobody even thinks of objecting!

Have you ever pondered how mineral water and soft-drink manufacturers who sell their product to you in a PET bottle take no further responsibility what happens to their non-biodegradable bottle? Most often, it ends up as litter in the environment, because the consumer simply does not know what to do with the bottle, other than tossing it away.

This is not how it should be. At the time of conceptualizing and designing the product, the manufacturer has the responsibility of thinking what will happen to the discarded packaging, or, in the case of non-consumables, to the product itself after its use. He must take the responsibility to create a safe avenue for its disposal or recycling.

This requires a mechanism to collect the empty container or used product. So he must set up that mechanism. For instance, the grocery shopkeeper may incentivate the consumer to return PET bopttles to him by initially charging a coupl;e of rupees as deposit for the bottle, which he returns when the consumer returns the bottle to him. These bottles can then be sent back to the company’s recycling facility. (This is how soft-drink bottles made of glass were returned to manufacturers until very recently, remember? We, the consumers, were OK with this system. So why the sudden urge to package everything in discardable materials?)

(-more-)
 
 
Notes:
 
 
Slide 1: INDIA’S FUTURE R B Roy Choudhury Memorial lecture Mumbai 29 January 2007
Slide 2: Even though the world has just discovered it, the India growth story is not new. It has been going on for 25 years old
Slide 3: What is the India story?
Slide 4: India Story 1) Rising GDP growth % average annual GDP growth 1900 – 1950 1950 – 1980 1980 – 2002 2002 – 2006 1.0 3.5 6.0 8.0 Sources: 1900-1990: Angus Maddison (1995), Monitoring the World Economy, 1990-2000:Census of India (2001), 20002005 Finance Ministry
Slide 5: India Story 2) Population growth is slowing % average annual growth 1901 – 1950 1951 – 1980 1981 – 1990 1991 – 2000 2001 – 2010 1.0 2.2 2.1 1.8 1.5 Sources: 1900-1990: Angus Maddison (1995), Monitoring the World Economy, 1990-2000:Census of India (2001)
Slide 6: India Story 3. Literacy is rising 1950 1990 2000 2010 (proj) % 17 52 65 80 Source: Census of India (2001)
Slide 7: India Story 4. Middle class is exploding % Million People 1980 2000 2010 (proj) 8 22 32 65 220 368
Slide 8: India Story 5. Poverty is declining 1980 2000 2010 (proj) 46% 26% 16% 1% of the people have been crossing poverty line each year for 20 years. Equals ~ 200 million.
Slide 9: India Story 6. Productivity is rising 30% to 40% of GDP growth is due to rising productivity
Slide 10: India Story 7. Per capita income gains (US$ ppp) 1980 2000 1178 3051 Source: World Bank
Slide 11: India Story 8. India is now the 4th largest economy And it will cross Japan between 2012 and 2014 to become the 3rd largest
Slide 12: THE INDIA MODEL IS UNIQUE
Slide 13: DRIVERS OF GROWTH India Domestic East and S.E. Asia Exports
Slide 14: DRIVERS OF GROWTH India Domestic Services East and S.E. Asia Exports Manufacturing
Slide 15: DRIVERS OF GROWTH India Domestic Services Consumption East and S.E. Asia Exports Manufacturing Investment
Slide 16: DRIVERS OF GROWTH India Domestic Services Consumption High tech, capital intensive industry industry East and S.E. Asia Exports Manufacturing Investment Low tech, labour intensive
Slide 17: IMPLICATIONS OF INDIA MODEL Domestic led • Insulation from global downturns • Less volatility
Slide 18: IMPLICATION OF INDIA MODEL Services led • Have we skipped the industrial revolution? • How do we take people from farms to cities?
Slide 19: IMPLICATION OF INDIA MODEL Consumption led • People friendly: Consumption as % of GDP India Europe China • 64 58 42 33 41 45 59 Less inequality – GINI INDEX India U.S China Brazil • The world needs another big consuming economy after the U.S.
Slide 20: Reasons for Success India’s success is market led whereas China’s is state induced. The entrepreneur is at centre of the Indian model
Slide 21: Rise of globally competitive Indian companies: Reliance, Jet Airways, Infosys, Wipro, Ranbaxy, Bharat Forge, Tata Motors, TCS, Bharati, ICICI and HDFC Banks
Slide 22: India has a vibrant private space > 100 Indian Companies have market cap of US$ 1 billion
Slide 23: India has a vibrant private space > 100 Indian Companies have market cap of US$ 1 billion > 1000 Indian Companies have received foreign institutional investment
Slide 24: India has a vibrant private space > 100 Indian Companies have market cap of US$ 1 billion > 1000 Indian Companies have received foreign institutional investment > 125 Fortune 500 companies have R&D bases in India
Slide 25: India has a vibrant private space > 100 Indian Companies have market cap of US$ 1 billion > 1000 Indian Companies have received foreign institutional investment > 125 Fortune 500 companies have R&D bases in India > 390 Fortune 500 companies have outsourced software development to India.
Slide 26: India has a vibrant private space > 100 Indian Companies have market > cap of US$ 1 billion 1000 Indian Companies have received foreign institutional investment 125 Fortune 500 companies have R&D bases in India 390 Fortune 500 companies have outsourced software development to India. 2% bad loans in Indian banks (vs ~ 20% in China) > > <
Slide 27: India has a vibrant private space > 100 Indian Companies have market > cap of US$ 1 billion 1000 Indian Companies have received foreign institutional investment 125 Fortune 500 companies have R&D bases in India 390 Fortune 500 companies have outsourced software development to India. 2% bad loans in Indian banks (vs ~ 20% in China) 80% credit goes to private sector (vs~10% in China) > > < >
Slide 28: But public space is a problem Although we have a: + Dynamic democracy with honest elections
Slide 29: Public space is a problem Although we have a: + Dynamic democracy + Free, lively media and press
Slide 30: Public space is a problem + Dynamic democracy with + Free, lively media and press But there is: - Poor governance
Slide 31: Public space is a problem + Dynamic democracy + Free, lively media and press - Poor governance - High populist subsidies, which results in a high fiscal deficit
Slide 32: Public space is a problem + + Dynamic democracy Free, lively media and press Poor governance High subsidies High fiscal deficit No money for infrastructure
Slide 33: Public space is a problem + + Dynamic democracy Free, lively media and press Poor governance High subsidies High fiscal deficit Creaky infrastructure Inefficient government companies
Slide 34: Earlier we had world class institutions, but they are now failing • Bureaucracy • Judiciary • Police
Slide 35: Contrast between public and private space raises the question : Is India rising despite the state ?
Slide 36: Economy grows at night when government is asleep
Slide 37: What explains India’s economic success? 2) Even slow reforms add up - state getting out of the way - every government has reformed since 1991
Slide 38: Key Reforms • Opened economy to trade and investment • Dismantled controls • Lowered tariffs • Dropped tax rates • Broke public sector monopolies
Slide 39: What explains India’s economic success? 1) Even slow reforms add up-state getting out of the way 2) Young minds are liberated
Slide 40: Mental Revolution - ‘I want to be Bilgay’ - Raju’s secret of success - Banianisation of society - 100 cable channels for $3 - Hinglish
Slide 41: What explains India’s economic success? 1) Even slow reforms add up-state getting out of the way 4) Young minds are liberated 3) India has found its competitive advantage in the knowledge economy
Slide 42: Looking Forward • 7% - 8% economic growth • Democracy will not permit more than 8% • 1.5% Population growth
Slide 43: This means a per capita income roughly of (on a ppp basis): ($) 2000 2005 2020 2040 2066 2100 3050 5800 16,800 37,000
Slide 44: Why will growth continue? Demographic dividend
Slide 45: Demographic trend points to sharp increases in input factors Demographic Split 1,600 1,400 1,200 1,000 800 600 400 200 0 1.5 bn 1.1 bn 54% 0-25 yrs 46% 25+ yrs 800 420 2005 2025 Labor Force Labor Force will double in the next 20 years
Slide 46: Demographic trend points to sharp increases in input factors Age Dependency 80% 60% 40% 20% 0% 1980's 2002 2025 China 2002 72% 62% <50 % 45% Savings Rate 50% 40% 30% 20% 10% 0% 1980's 2002 2025 China 2002 17% 24% 35+% 42% Higher savings and investment rate will translate into higher GDP growth
Slide 47: India’s demographic advantage means that its high growth will continue longer term while China will slow
Slide 48: INDIA WILL GRADUALLY TURN MIDDLE CLASS 1980 2000 2010 2020 % 8 22 32 50 West of the Kanpur-Chennai line 50 East of the Kanpur-Chennai line 2040
Slide 49: “By 2010 India will have world’s largest number of English speakers” “When 300 million Indians speak a word in a certain way, that will be the way to speak it.” -Prof. David Crystal, Cambridge Encyclopedia of the English Language
Slide 50: What could stop the show? • • • • Fiscal deficit Infrastructure Bad governance Nuclear war
Slide 51: REFORM SCHOOL Labour
Slide 52: REFORM SCHOOL Labour Agriculture
Slide 53: Second Green Revolution • technologically led, based on GM seeds • labor intensive • needs reforms
Slide 54: REFORM SCHOOL Labour Agriculture Power
Slide 55: REFORM SCHOOL Labour Agriculture Power Red tape
Slide 56: REFORM SCHOOL Labor Agriculture Power Red tape Governance
Slide 57: Corporate Governance - High in India - Low in China
Slide 58: Bottom Line • Indian prosperity is on auto pilot • Can’t do without government. But governance reform will take time, till middle class is dominant. • Human capital will continue to flower based on private initiative, and drive the nation
Slide 59: India has law, China has order -India got democracy before capitalism and this has made all the difference -It will be slower than China but its path will be surer -India more likely to preserve its way of life
Slide 60: The Wise Elephant

   
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