How India's growth will outpace China's - The Economist

[KS]

I beg to disagree with friend CardSharp and with you, in part.


India has certainly underperformed, and the reasons for that have been analysed to death. In short, it was due to an autarkic economic system, controlled and managed centrally through licenses and permits. With the opening up of the economy, first by Manmohan Singh when he was the Finance Minister for Narasimha Rao, and then by a succession of differently-motivated and differently-skilled Finance Ministers, largely from the Congress, ironically a party that I hate, has removed some major impediments. About 35% to 40% of the work is done.

But on the other hand, this kept us out of the clutches of IMF conditionality packages, and stopped us from becoming a South American client state of the Dumbarton Oaks institutions. Even today, our firm and (by and large) independent-minded central bank does a very good job of managing the economy. It is not responsible for inflationary pressures due to a chronic current deficit and the government's resort to printing more money.

I would say that this underperformance brought benefits along with the costs.

It stopped the creation of slave towns in the form of free trade zones. The laws of the land apply everywhere, even in those zones. This is particularly true of the labour laws, which, while they need overhaul and drastic reform, need not - should not lose their teeth.

It stopped the creation of monster projects oriented to 'development' of a kind, of the Three Gorges kind. Our own example is the Narmada project, of course.

It stopped the flood of investment in idiotic and irrelevant areas such as retail, where frankly we really, really don't need one more mall, we really don't need to introduce Walmart to the country.

I could go on but some very healthy filtering has happened, there is a good mix of indigenous and overseas talent and technology, and I feel comforted and safe that we never had a Greenspan clone here.

If, when we open up the economy further, and de-regulate it further, we do not find painfree jobs, we really haven't done much, have we? I would certainly like China's growth, but without the savage measures that sometimes made that growth possible. In a democracy, such methods are not possible, and should not even be discussed.

Though I cannot dis-agree with you here,my contention is India as a nation has certainly under-performed to her true potential , a potential she could have achieved if some visionary leaders were at the helm like a older day counterpart of Lula of Brazil,or atleast an MMS now,which she did not under the Gandhi Family.

With regard to the remark of Kartic Sri, corrupt politicians and red-tape govt babus are emphatically not a concomitant of parliamentary democracy as such.

Regards,

No they are not an essential component of parliamentary democracy as such - perhaps I should have phrased my sentence better - but they are present in varying degress and unfortunately its the superlative degree in India.

 

[huzihaidao12]

I beg to disagree with friend CardSharp and with you, in part.


India has certainly underperformed, and the reasons for that have been analysed to death. In short, it was due to an autarkic economic system, controlled and managed centrally through licenses and permits. With the opening up of the economy, first by Manmohan Singh when he was the Finance Minister for Narasimha Rao, and then by a succession of differently-motivated and differently-skilled Finance Ministers, largely from the Congress, ironically a party that I hate, has removed some major impediments. About 35% to 40% of the work is done.

But on the other hand, this kept us out of the clutches of IMF conditionality packages, and stopped us from becoming a South American client state of the Dumbarton Oaks institutions. Even today, our firm and (by and large) independent-minded central bank does a very good job of managing the economy. It is not responsible for inflationary pressures due to a chronic current deficit and the government's resort to printing more money.

I would say that this underperformance brought benefits along with the costs.

It stopped the creation of slave towns in the form of free trade zones. The laws of the land apply everywhere, even in those zones. This is particularly true of the labour laws, which, while they need overhaul and drastic reform, need not - should not lose their teeth.

It stopped the creation of monster projects oriented to 'development' of a kind, of the Three Gorges kind. Our own example is the Narmada project, of course.

It stopped the flood of investment in idiotic and irrelevant areas such as retail, where frankly we really, really don't need one more mall, we really don't need to introduce Walmart to the country.

I could go on but some very healthy filtering has happened, there is a good mix of indigenous and overseas talent and technology, and I feel comforted and safe that we never had a Greenspan clone here.

If, when we open up the economy further, and de-regulate it further, we do not find painfree jobs, we really haven't done much, have we? I would certainly like China's growth, but without the savage measures that sometimes made that growth possible. In a democracy, such methods are not possible, and should not even be discussed.

With regard to the remark of Kartic Sri, corrupt politicians and red-tape govt babus are emphatically not a concomitant of parliamentary democracy as such.

Regards,

Joe, you must represent the potential and development in India, can see it from you, but India's problems can be seen from you.

Joe, you may be too elitist, represents the best part of India, but at least part of the population. Your eyes may not see the bottom of people, but also the most populous part. Your body while flashing the future success and failure, it is India.

 

[Joe Shearer]

Joe, you must represent the potential and development in India, can see it from you, but India's problems can be seen from you.

Joe, you may be too elitist, represents the best part of India, but at least part of the population. Your eyes may not see the bottom of people, but also the most populous part. Your body while flashing the future success and failure, it is India.

This is a very shrewd observation, and one that I will take a little time to respond to. Please bear with me.

I realise that presenting reason and logic with relentless consistency may seem to be completely isolated from other examples, when some fellow countrymen perhaps have not managed to maintain their mental discipline.

Please consider, however, that rather than consider their behaviour normal and mine abnormal, perhaps my behaviour is normal and their's abnormal.

After all, people who are to be found on defence fora are there to exchange views on defence-related matters, or to satisfy their need for an exchange or exchanges with others, or a mixture of these two. When it is a question of exchanges with others, very often young people in particular, and a very specific, non-acculturated sub-section of them even within that sub-set, tend to get aggressive and quarrelsome.

Perhaps this is a compensation. Perhaps this makes up for inadequacies of other sorts. The point is that we should not mistake this for typical behaviour from that country.

If I could have the privilege of hosting you on a widespread tour of my country, you might find, first, that the humblest of the humble desire peace and good relations with other nations; that middle class people who are not very young also desire good relations and peace; and that the desire for war and aggressive actions, against some of our own countrymen or against other countries, is restricted to some peculiar social characters. They are not normal in external society; only in Internet fora do they find others like themselves and seem to be the norm. This is not true; they are not the norm.

India has now become infamous, rather like China, for having organised claques who descend en masse on fora online, and dominate them with their own brand of aggression and violent views. This is emphatically not representative. To give you an example, as a member of another liberal Pakistani forum, very liberal and democratic, I have seen half a dozen Indians come to be rated almost as highly as the best of the Pakistani posters. This is the true character and personality that you should recognise, not the foul-mouthed, screaming masses of fanboys who make life hell wherever they descend.

 

[huzihaidao12]

This is a very shrewd observation, and one that I will take a little time to respond to. Please bear with me.

I realise that presenting reason and logic with relentless consistency may seem to be completely isolated from other examples, when some fellow countrymen perhaps have not managed to maintain their mental discipline.

Please consider, however, that rather than consider their behaviour normal and mine abnormal, perhaps my behaviour is normal and their's abnormal.

After all, people who are to be found on defence fora are there to exchange views on defence-related matters, or to satisfy their need for an exchange or exchanges with others, or a mixture of these two. When it is a question of exchanges with others, very often young people in particular, and a very specific, non-acculturated sub-section of them even within that sub-set, tend to get aggressive and quarrelsome.

Perhaps this is a compensation. Perhaps this makes up for inadequacies of other sorts. The point is that we should not mistake this for typical behaviour from that country.

If I could have the privilege of hosting you on a widespread tour of my country, you might find, first, that the humblest of the humble desire peace and good relations with other nations; that middle class people who are not very young also desire good relations and peace; and that the desire for war and aggressive actions, against some of our own countrymen or against other countries, is restricted to some peculiar social characters. They are not normal in external society; only in Internet fora do they find others like themselves and seem to be the norm. This is not true; they are not the norm.

India has now become infamous, rather like China, for having organised claques who descend en masse on fora online, and dominate them with their own brand of aggression and violent views. This is emphatically not representative. To give you an example, as a member of another liberal Pakistani forum, very liberal and democratic, I have seen half a dozen Indians come to be rated almost as highly as the best of the Pakistani posters. This is the true character and personality that you should recognise, not the foul-mouthed, screaming masses of fanboys who make life hell wherever they descend.

Completely misunderstood, just in the economy and your views. Not for others. Of course, you still is enough wisdom and reason, always you.

 

[huzihaidao12]

India's cities will have a big development, I think, however, India has a large population, the city can solve only a small part of the employment, small cities and rural development? Joe, India's problem is not a small part of the population, but the majority of the population decided, however, the Government of India only to defense, there is not enough strength to attack. I mean, the Indian government can respond to the economic development of some large cities, can do something in the wind, however, there is no big "change" forces, completely helpless in the headwind, you know what I mean, success or failure is not the most dominant but at the shortest at the decision

 

[Joe Shearer]

India's cities will have a big development, I think, however, India has a large population, the city can solve only a small part of the employment, small cities and rural development? Joe, India's problem is not a small part of the population, but the majority of the population decided, however, the Government of India only to defense, there is not enough strength to attack. I mean, the Indian government can respond to the economic development of some large cities, can do something in the wind, however, there is no big "change" forces, completely helpless in the Headwind, you know what I mean, success or failure is not the most dominant but at the shortest at the decision

It is regrettable, but you are essentially correct. India's current economic development has been based on the services and manufacturing sectors, and there has not been sufficient attention paid to agriculture or to forestry and mining, along with that, to water management.

There are many of us who advocate greater investment in agriculture, greater investment in the rural sector. We are a minority at the moment, but people have begun to realise that we cannot go forward as long as 80% of our population, the rural population, is left behind.

It is hoped that this will change. Soon. How soon, nobody wants to guess. Mainly because we don't know.

Until then, as you have put with some ruthless clarity, Government of India can only defend, not attack. And, too, you are continuing to be right about this most aggravating issue: the result will depend on quick decision, to some extent. In India, however, it is impossible to decide without creating consensus of some sort.

That is both our strength and our weakness.