BRICs Biggest Currency Depreciation Since 1998 To Worsen

[Chinese-Dragon]

India’s budget gap amounted to 5.8 percent of gross domestic product, compared with 4.2 percent in Portugal and 3.9 percent in Italy, according to data compiled by Bloomberg.

Portugal and Italy are both "developed" countries. They are also two of the worst performers in the Eurozone. So it is understandable that they have a high budget deficit.

But why does India have a higher budget deficit than BOTH of them? India is still a "developing" country, why do they have a higher budget deficit than both Portugal and Spain?

India seems to be trying to jump straight into the late-stage Western economic model of high consumption based on debt and deficit. Which is fine for Western countries that are ALREADY developed, but for a developing country like India, that seems like suicide.

No wonder India is getting downgraded left and right.

 

[IndoUS]

Portugal and Italy are both "developed" countries. They are also two of the worst performers in the Eurozone. So it is understandable that they have a high budget deficit.

But why does India have a higher budget deficit than BOTH of them? India is still a "developing" country, why do they have a higher budget deficit than both Portugal and Spain?

India seems to be trying to jump straight into the late-stage Western economic model of high consumption based on debt and deficit. Which is fine for Western countries that are ALREADY developed, but for a developing country like India, that seems like suicide.

No wonder India is getting downgraded left and right.

Because Indian government is spending a lot of money on infrastructure which most of the outside investors wanted(specially foreign companies which always cry about it) and are looking forward to. Most of the spending goes toward the market and subsidizing the oil prices. India unlike the west doesn't have a developed infrastructure so it has to spend money to develop it hence the deficit.

 

[Chinese-Dragon]

Because Indian government is spending a lot of money on infrastructure which most of the outside investors wanted and are looking forward to. Most of the spending goes toward the market and subsidizing the oil prices. India unlike the west doesn't have a developed infrastructure to it has to spend money to develop it hence the deficit.

China spends far more on infrastructure than India, by a very significant margin. So that doesn't make sense.

 

[IndoUS]

China spends far more on infrastructure than India, by a very significant margin. So that doesn't make sense.

Yes but China is also far ahead of India in terms of market development, India's development story started in the mid to late 90's and is fairly new compared to China.

 

[Chinese-Dragon]

Yes but China is also far ahead of India in terms of market development, India's development story started in the mid to late 90's and is fairly new compared to China.

Actually, China and India had the same GDP in 1990. So we started out from the same place.

The difference (obviously) is that we were able to sustain double-digit growth for several decades in a row. Whereas India did not.

 

[IndoUS]

Actually, China and India had the same GDP in 1990. So we started out from the same place.

The difference (obviously) is that we were able to sustain double-digit growth for several decades in a row. Whereas India did not.

GDP was same but the growth rates where much different, India had a more closed market and little to no outside interventions it was not till we started to open up market in the mid 90's that the actual gowth started to pick up, unlike China which was alreay growing.

 

[buddyboyyash]

China spends far more on infrastructure than India, by a very significant margin. So that doesn't make sense.

true....but isnt it also true that most of the work is awarded to chinese companies itself??...

 

[Chinese-Dragon]

true....but isnt it also true that most of the work is awarded to chinese companies itself??...

If your own domestic companies can do it, then why pay foreign companies to do it?

 

[IndoUS]

If your own domestic companies can do it, then why pay foreign companies to do it?

The domestic companies can do it, this just that government officials won't get the kickbacks. Plus in China if the government gives and order then the company has to do it. But in India the system is much more messed up to say the least.

 

[kawaraj]

it really pose a question if India's growth sustainable in a comparison mode with China. In China's case the GOV withhold most of the growth result thus amass a huge foreign reserve and tax revenue. The cons is the dormant status of domestic consumption.

India depends on its software industries to support growth and most of the capital inflow goes to private or corruptions. Therefore consumption won't be a problem but the policy leeway is limited as Gov lack resources to tackle those problem.

India's mode maybe sustainable in a stable environment, but China's can withstand crisis. Both need to learn lessons.

 

[sherindian]

it really pose a question if India's growth sustainable in a comparison mode with China. In China's case the GOV withhold most of the growth result thus amass a huge foreign reserve and tax revenue. The cons is the dormant status of domestic consumption.

India depends on its software industries to support growth and most of the capital inflow goes to private or corruptions. Therefore consumption won't be a problem but the policy leeway is limited as Gov lack resources to tackle those problem.

India's mode maybe sustainable in a stable environment, but China's can withstand crisis. Both need to learn lessons.

software industry is big in india but it will not be like that forever. india's next growth will come from infrastructure and massive industriliasiation. our govt is ready for that even if we go into massive debts although i dont think we will as our economy is mostly domestic oriented.

chinese growth right now is not sustainable and the ppl ther know it. china will keep growing for some time now on foreign demand and then have slow growth for some years and then return back to high growth by boosting domestic consumption. both countries have a long way to go.

 

[Chinese-Dragon]

chinese growth right now is not sustainable and the ppl ther know it. china will keep growing for some time now on foreign demand and then have slow growth for some years and then return back to high growth by boosting domestic consumption. both countries have a long way to go.

People have been saying the exact same thing for the past 30 years.

They said: China can not possibly sustain double-digit growth for a whole decade. After that, it became two decades.

Then on the third decade, they said it was economically impossible for a country to sustain double-digit growth for three decades in a row.

But we beat all the projections, and we broke all their economic models.

 

[Boson]

People have been saying the exact same thing for the past 30 years.

They said: China can not possibly sustain double-digit growth for a whole decade. After that, it became two decades.

Then on the third decade, they said it was economically impossible for a country to sustain double-digit growth for three decades in a row.

But we beat all the projections, and we broke all their economic models.

And while the above happened, China is burning 48.3% of the world's coal in less than 2% of the land area.

10 years after, CD will come back and say, now we burn 83% of the world's coal ... we can barely breathe... but GDP growth is still 10%.

US embassy will no longer publish the pollution figures in Beijing, it will simply relocate to an off-shore location.

US embassy for china will be in touch with the CPC govt by video conferencing only.. apart of from occasional visits to Beijing in space suits:

 

[faithfulguy]

software industry is big in india but it will not be like that forever. india's next growth will come from infrastructure and massive industriliasiation. our govt is ready for that even if we go into

India does not have a large software industry. It does have a large call center industry and most of the software if for the call centers. India is trying to be a developed country without manufacturing. If India cannot pull it off, it would be a big joke and others will questions whether India even belongs to BRICS? Indian Expat might regard India as the most disappointing of the BRICS countries.

 

[S10]

In another news, the Rupee just dipped below 57 to 1 US dollar. I'm guessing the next stop is 60 to 1. Some might argue it helps export, but India is running a trade deficit