Jan 19, 2011

A few home truths about INDIA

I found the following topic interesting So i copied it from  Atanu Dey on India's Development

A sense of optimism is an absolutely essential necessity for any future success. That’s true not just at the individual level; collective optimism is as indispensable for national success. However, misplaced optimism grounded on delusions of grandeur can ensure failure through misalignment of priorities and mis-allocation of limited resources. So it is not out of plain crotchety contrariness but rather out of welfare concerns that one must take a dispassionate look at reality to base one’s expectations on, and to chart out a course of action. The balance sheet must include an accurate account of current assets and liabilities — not just future expected earnings grabbed out of the thin air of wishful thinking. I find that balance missing in many of the reports that are generally published by the main stream media and which land in my inbox enthusiastically forwarded by the “mera bharat mahan” brigade.

It is tiring to read yet another article how India is going to be (if it is not already) a “super power”. Or that by such-and-such date, India’s GDP will be growing at some particular rate. Growth rates are meaningful only when understood in the context of the base on which they are computed.

India may overtake China as the world’s fastest growing major economy by 2015, as the South Asian nation doubles infrastructure investment and adds six-fold more workers than its northern neighbor, Morgan Stanley said.
India’s growth may accelerate to 9.5 percent between 2011 to 2015, Morgan Stanley economist Chetan Ahya said in an interview from Singapore today. India’s gross domestic product has expanded at an average 7.1 percent over the decade through the third quarter of 2009, compared with 9.1 percent in China, which surpassed Japan as the second-largest economy last quarter.
So what? Over the last decade, the growth rate of my wealth has been significantly higher than the growth rate of Bill Gates’ wealth.
I have never understood that fascination that some people have with aggregate measures. Here’s one example from a few months ago published in Rediff: India to be top economic superpower by 2030: Survey.
The Indian economic tiger is set to roar and become the most important economy in the world by 2030, says a survey. . . India is already moving up the economic league tables as the 12th largest economy in the world, as per the World Bank.
Why should it matter to anyone’s well-being how large India’s economy is? Per capita measures are more meaningful than aggregates. Let me put it this way. Take any of the small developed economies such as Finland, Switzerland, New Zealand, etc. They will never become an economic (or any other sort of) super power on this side of eternity. But given a choice I would rather have a Swiss per capita income than the per capita income of “economic super power” India now or even in some mythical future when it becomes the “largest economic power.”
Allow me to locate India in the present global context a little more realistically. The picture that emerges is not as rosy as as the newspapers would have your believe. There’s a very sensible reason for a reality check, which I will go into presently.
The Global Competitiveness Report 2009-10 published by the World Economic Forum ranks India in the 89th place out of 133. India is listed in the group “The First Stage of Development” — per capita income less than $2,000 — in the company of such countries as Burundi, Ethiopia, Lesotho, Mozambique, Uganda, Zimbabwe, etc. Those countries are not in any danger of becoming superpower any time soon.
I suspect that those countries in the “Stage 1″ of development share more than just low per capita income. I think “per capita” corruption would be another tie that binds.
We Indians of course can take some comfort that India is not as economically backward as, say, the Islamic Republic of Pakistan. Unfortunately, that is not quite true.
I checked out how India fared relative to Pakistan. Why? Because Pakistan really sets a very low bar and I wanted to see how far above India sails over it. Anyway, you be the judge. I state here some of the numbers that you will find if you were to click on the many little drop-down list in the graphics.
India is ranked 78 overall (in the Newsweek study); Pakistan comes in at 89. No surprise there.
In the “Education” sector, India’s literacy rate is higher at 61.4% (Pakistan 50.4%), but surprisingly India’s average years of schooling is 10.3 — lower than Pakistan’s (13.2).
Life expectancy is marginally higher in India: 56 years (55 years). Here are “Quality of life” indicators:
{Click on image to go to the source page.}
Note that the per capita incomes are not too different. But income inequality (GINI) is worse in India: 36.8 (31.2). Not just that, 75.6% of Indian’s live on less than $2 a day, as compared to 60.3% in Pakistan.
We all know that Pakistan has been under military dictatorship for almost all its existence. That is not conducive to economic growth. Couple that with the burden of Islam, and it is easy to see why Pakistan is essentially a basket case.
But how do you explain India’s basket-case-ness? Consumption per capita in India, $632, is lower than in Pakistan ($789). Manufacturing as a percentage of GDP is 14.7% in India; it is 34.1% in Pakistan. It takes 7 years to resolve insolvency, only 2.8 years in Pakistan. It takes 30 days to start a new business in India; it takes 20 days in Pakistan.
Here’s another graphic on “Economic Dynamism.”
The reason for India’s basket-case-ness is because for almost all of its existence since 1947, it has been under Nehruvian socialism. Nehru gave India the so-called “Nehru rate of growth” and his clan made sure that India stuck to that growth rate.
There were two brief episodes of hope: PV Narasimha Rao ditched Nehruvian stupidity. His reward for freeing India? He has been erased from the history of India by Nehru’s clan. Then there was Atal Bihari Vajpayee. He carried on the liberalization of India that PVNR started. But as bad luck would have it, the incompetent came back to power and Mr Manmohan Singh (fake prime minister but real toady to the Italian Sonia Maino) is presiding over India’s back slide into Nehruvian stupidity.
In summary, India’s present condition is not significantly different from Pakistan’s. Pakistan has the curse of Islam and military dictatorship. India has the curse of Nehruvian socialism and Congress mismanagement. The future of the two nations could be different, however. The Indian voter has the opportunity to kick the Congress out lock stock and barrel. But I will not go into that right now.
What’s the Point?
Why am I raining on someone’s parade? Actually, I am interested in seeing India progress beyond where it stagnates today. Major mistakes were made by powerful people that led to this awfully miserable situation. How did India come to have about 800 million desperately poor people? Why do just 8 of India’s poorest states have more poor people in them than the poor people in 26 poorest countries in Africa?
Why are half of India’s children below 5 years of age malnourished? Childhood malnourishment causes mental retardation. What is going to be the future of these over 100 million children? How will they ever get out of poverty?
India had an estimated 200 million poor people when Nehru took over the ruling of the country. Since that fateful day, India’s poverty has deepened and widened. How many hundreds of millions of Indians have died prematurely after living lives of untold misery since Nehru took over as the dictatorial authority?
Surely all that has to be laid at the feet of the Nehru-Gandhi clan — people whose names are attached to thousands of institutions, roads, ports, airports, government schemes, buildings . . . It is heart breaking to see that the very people who dragged India to its knees and strangled its very life breath consider it their birth-right to continue to misrule India.
When will India wake up? How will it wake up?
This is important because unless we understand that mistakes were made, we are unlikely to know what to do to repeat them. Unless we get the people who did this to India out of power, there can be no hope for India. Note the operative word “we”: it is we who have to get these blood-sucking parasites out of power.
I would like to go into that tomorrow. And I will argue that ultimately we, the people, are to blame. And therefore we have to fix the problem.