Indian Economy : News,Discussions & Updates

[Notsuperstitious]

It's often said NDA is no better than UPA without providing any facts and figures. So thought of starting posts with actual performance comparisons of both governments in different sectors.

This one is about highway construction. In first quarter of 2013-14, highway construction was 13 km/day and 20 km/day was considered an impossible task admitted by minister Kamal nath himself!!

From 13 km/day it increased to 26.6 km/day for first two months of financial year 2017-18. So it's the same ministry, same staff, same organisation, yet performance increased by 100% in a matter of 4 years.

These are the links from which I got the data. Any corrections in the posted data are welcome.

Building 20 km of roads per day is too good to be true

India constructs 30 km/day highway under Modi's roadways push

Those roads are only for high caste north Indian Hindus. Everybody knows that.

If you think those roads, those 25 crore bank accounts, those 300000 crore from auctioned licenses, those millions of toilets, swach bharat abhiyan, those improvements in ease of doing business index, competitiveness index, tourism index, transperance index etc are anything but a smokescreen to hide the daily massacres against Muslims, Christians and lower castes then you are a bigot.

Didn't u know all of the above and demonetisation and GST are just cheap populist moves?

 

[Arvind]

Make in India fails to quench nation's dependence on made in China goods

When 'Make in India' was launched more than three years ago in September 2014, one of the hopes was it would diminish, or at least dampen, India's increasing reliance on imports of Chinese machinery and equipment, which makes up a huge chunk of India's trade deficit.

But three years on, new numbers suggest this hasn't been the case. In fact, India's reliance on Chinese made goods has only grown.

While India's imports of Chinese machinery have risen by as much as 25 per cent in the three years since, it's exports to China have alarmingly remained stagnant- and in fact fell slightly - in the period from 2014 to 2017.

In 2017, India imported $68 billion worth of goods from China, a 16.5 per cent year-on-year rise, according to numbers released on January 12 by China's General Administration of Customs.

In 2014, the year Make in India was launched, India's imports were $54 billion. Since then, imports, mainly of Chinese machinery and equipment as well as pharmaceuticals, have risen 25 per cent.

So has India's trade deficit with China, which has risen from $37.8 billion in 2014 to $51.6 billion last year.

Two-way trade is up from $70 billion in 2014 to $84.4 billion, but the rise in trade has been entirely led by India's hunger for imports from China. Worryingly, in this time, India's exports to China have actually fallen.

India exported $16.4 billion worth of goods 2014, mainly low-end exports such as ores and yarn. Over three years, India's exports have registered no growth and in fact fell slightly to $16.3 billion last year, even as the deficit crossed $50 billion in China's favour.

Make in India fails to quench nation's dependence on made in China goods

@Superkaif By any chance you watch US TV show "Shark Tank" or UK show "Dragons Den"?

 

[Superkaif]

@Superkaif By any chance you watch US TV show "Shark Tank" or UK show "Dragons Den"?

Dragons Den sir - always chuckle at some of the pitches......

 

[Arvind]

Dragons Den sir - always chuckle at some of the pitches......

Watch Shark Tank, far better than that.

Anyways Why I referred them here because, the price point is very important aspect and the cost to build your product determine the price you can ask from customer after maintaining healthy margins to operate. I have seen investors not chosing to invest if entrepreneur refuse to move his production to China. That's big manufacturing eco-system China already has and it wont be a couple of year task to start challenging them.

I am not sure what is being done to build a ground for manufacturing, but expecting a result, so early, is under estimating the Chinese advances in the production space.

 

[vsdoc]

Watch Shark Tank, far better than that.

Anyways Why I referred them here because, the price point is very important aspect and the cost to build your product determine the price you can ask from customer after maintaining healthy margins to operate. I have seen investors not chosing to invest if entrepreneur refuse to move his production to China. That's big manufacturing eco-system China already has and it wont be a couple of year task to start challenging them.

I am not sure what is being done to build a ground for manufacturing, but expecting a result, so early, is under estimating the Chinese advances in the production space.

There was an article I glanced through recently that said that India had missed the industrial boom bus that China was at the right time and place to catch.

And that India could never catch up - on industrial manufacturing. But would need to leverage it's resources, manpower and economy differently.

Cheers, Doc

 

[Arvind]

There was an article I glanced through recently that said that India had missed the industrial boom bus that China was at the right time and place to catch.

And that India could never catch up - on industrial manufacturing. But would need to leverage it's resources, manpower and economy differently.

Cheers, Doc

India made a choice then: service vs manufacturing. I wont blame people taking decision as no one holds a crystal ball, however in my personal opinion, manufacturing must have been the choice considering the population. However unlike china, India being agrarian country, might have miscalculated the millions of hand who will look out for work in future.

 

[Superkaif]

Watch Shark Tank, far better than that.

Anyways Why I referred them here because, the price point is very important aspect and the cost to build your product determine the price you can ask from customer after maintaining healthy margins to operate. I have seen investors not chosing to invest if entrepreneur refuse to move his production to China. That's big manufacturing eco-system China already has and it wont be a couple of year task to start challenging them.

I am not sure what is being done to build a ground for manufacturing, but expecting a result, so early, is under estimating the Chinese advances in the production space.

I accept this will be a long haul. Problem is how long? Politics, as we have seen recently, is an unpredictable field - how much time will Modi’s government need to implement and gain the trust of investors.
My personal opinion is that China has conquered incredible advancements are able to smash competitors and India may struggle

 

[Arvind]

I accept this will be a long haul. Problem is how long? Politics, as we have seen recently, is an unpredictable field - how much time will Modi’s government need to implement and gain the trust of investors.
My personal opinion is that China has conquered incredible advancements are able to smash competitors and India may struggle

Poor are vote bank now, and politics is compelling government to engage in populism. Interesting times ahead and will know the guts of Modi seeing his actions in penultimate year to elections.

 

[vsdoc]

He's a good speaker.

Cheers, Doc

 

[Bali78]

India made a choice then: service vs manufacturing. I wont blame people taking decision as no one holds a crystal ball, however in my personal opinion, manufacturing must have been the choice considering the population. However unlike china, India being agrarian country, might have miscalculated the millions of hand who will look out for work in future.

I don't think India deliberately chose services. It just happened thanks to Y2K problem and subsequent boom in software services.
We always lacked the infrastructure and policies(regulatory approval, taxation etc) required for competitive manufacturing and hence missed the bus.
It's not that we lag in every sector. Automobiles, electronics assembly and pharma are doing pretty good.

 

[Bali78]

I accept this will be a long haul. Problem is how long? Politics, as we have seen recently, is an unpredictable field - how much time will Modi’s government need to implement and gain the trust of investors.
My personal opinion is that China has conquered incredible advancements are able to smash competitors and India may struggle

It's the other way round. As China grows economically, it will be a huge challenge to keep manufacturing cost low. So sooner or later China has to give up low cost manufacturing and move up in the value chain, if it wants to move it's population to high income category. Or China will be struck as a middle income country like Mexico or Brazil.

Point is when the low cost manufacturing moves out of China, will India be able to capitalize? Already Asean countries have made their space in manufacturing. Of course they cannot be considered as replacement for China. The only country who can provide the man power is India and I believe current government is doing pretty good in clearing up the mess created by UPA and preparing the base. The actual result will be visible at least 3-5 years from now.

 

[Arvind]

I don't think India deliberately chose services. It just happened thanks to Y2K problem and subsequent boom in software services.
We always lacked the infrastructure and policies(regulatory approval, taxation etc) required for competitive manufacturing and hence missed the bus.
It's not that we lag in every sector. Automobiles, electronics assembly and pharma are doing pretty good.

Y2K was there for all, opportunities were open. We lack infra and policy because we were not keen to go all in in manufacturing. Service industry was promoted.

 

[Arvind]

It's the other way round. As China grows economically, it will be a huge challenge to keep manufacturing cost low. So sooner or later China has to give up low cost manufacturing and move up in the value chain, if it wants to move it's population to high income category. Or China will be struck as a middle income country like Mexico or Brazil.

Point is when the low cost manufacturing moves out of China, will India be able to capitalize? Already Asean countries have made their space in manufacturing. Of course they cannot be considered as replacement for China. The only country who can provide the man power is India and I believe current government is doing pretty good in clearing up the mess created by UPA and preparing the base. The actual result will be visible at least 3-5 years from now.

Agreed. Wait and be ready must be the key.

 

[Superkaif]

It's the other way round. As China grows economically, it will be a huge challenge to keep manufacturing cost low. So sooner or later China has to give up low cost manufacturing and move up in the value chain, if it wants to move it's population to high income category. Or China will be struck as a middle income country like Mexico or Brazil.

Point is when the low cost manufacturing moves out of China, will India be able to capitalize? Already Asean countries have made their space in manufacturing. Of course they cannot be considered as replacement for China. The only country who can provide the man power is India and I believe current government is doing pretty good in clearing up the mess created by UPA and preparing the base. The actual result will be visible at least 3-5 years from now.

Thanks for the response - will get back to you as I’m now busy with family ?

 

[Bali78]

Y2K was there for all, opportunities were open. We lack infra and policy because we were not keen to go all in in manufacturing. Service industry was promoted.

Service sector was promoted because it didn't require the government to do much apart from creating SEZs and providing tax relief. Plus the return from service sector was immediate and huge.

Do you remember the condition of roads in 90s till Vajpayee started the highway project? Trucks used to be struck at state borders for days. We didn't stand a chance against China. Plus China opened up it's economy a decade before us. Naturally they had the first mover advantage.

Most people who crib about our manufacturing probably are not aware of how pathetic it was during Congressi license raj. Waiting period for a bajaj scooter could be as much as 8-10 years during 70s. Even till 1995, waiting period for Maruti 800 was 9 months in Delhi.
Now India is manufacturing around 4 millions car per year !!

We need to be patient and move in the right direction. Rome was not built in a day!!

 

[vsdoc]

Y2K was there for all, opportunities were open. We lack infra and policy because we were not keen to go all in in manufacturing. Service industry was promoted.

A convenient refuge. A shiny bandaid.

We lost at least two generations of innovation in science and industry and necessary girdling of the loins and gritting our teeth and taking the hard yards because of the easy quick money of the BPO industry.

Cheers, Doc

 

[_Anonymous_]

A convenient refuge. A shiny bandaid.

We lost at least two generations of innovation in science and industry and necessary girdling of the loins and gritting our teeth and taking the hard yards because of the easy quick money of the BPO industry.

Cheers, Doc

Define "we"

 

[vsdoc]

Define "we"

Indians of 2018, including some old farts who saw a quantum jump in cash n options post college in the 90s.

Those still in India.

Many moved abroad and did not come back.

They do not get included.

Cheers, Doc

 

[_Anonymous_]

Indians of 2018, including some old farts who saw a quantum jump in cash n options post college in the 90s.

Those still in India.

Many moved abroad and did not come back.

They do not get included.

Cheers, Doc

You're shifting the goalposts .The government of the day is responsible for creating the necessary ecosystem . Be it manufacturing or services . Entrepreneurs are merely responsible to their shareholders/ stakeholders and to a lesser extent to their employees .

 

[vsdoc]

You're shifting the goalposts .The government of the day is responsible for creating the necessary ecosystem . Be it manufacturing or services . Entrepreneurs are merely responsible to their shareholders/ stakeholders and to a lesser extent to their employees .

What goalposts?

You jumped into the discussion asking who we was.

You've not even made a post to state your position.

That would have been the natural starting point for a debate, in which the initial goalposts are set.

Cheers, Doc