Who destroyed our hope?

[kurup]

I have 3 posts in my mind, but cannot post from a mobile. So, I will just post a short reply:

Internal consumption driven economy is the most stable one, Indian economy remained steady during the global crisis without much economic stimulus because it is consumption driven. And since our own consumption rate is very low with major scope of growth; our consumption driven model can produce a decent growth rate if managed well.

Export driven economies are a bit less stable compared to the consumption driven model, but this model can actually make a country "Rich" and sustain it over a period of long time if that country can maintain its edge in R&D and brand building while keeping the cost low (US economy is more resilient than you can imagine). Export driven economy is the best way to grow, especially for smaller countries with low population/consumption or saturated consumption level.

Outsourcing driven economies, often mistaken as export driven economies, are the most unstable ones and should be treated as a short term solution, that too with caution and a long term goal to make it an export driven economy from the very begining. The irony is that the death of a outsourcing driven economy is built into its success, initially the economy grows at a rapid rate, with it the average salaries and wages grow, cost of operation grows, inflation goes up, economy inflates, and slowly the outsourcing destination becomes unviable, businesses leave the place for the same reason they left the previous place, this is because you were going up on a borrowed ladder. The only way out is to make it a export driven economy, but that shift is far more difficult to do, especially for big countries with huge population.

I think we have lots of growth potential left in our consumption driven model, at the same time we should also focus on outsourcing for short term growth and extra fund that we really need, but we should not overdo it so much that we become dependent on it, rather, we should focus on export driven model and work hard to go up the value chain, i.e. export of finished products, not raw materials. For that we need to focus on R&D and help our companies to go global.

This is a short reply ....... ....... what will be your long reply ??

 

[Swachh_Bharat]

I'm not saying India can or will sustain 3 decades of 10% GDP but it can certainly look to achieve an average of 9-10% for about 4-5 years and then have a sustained period of 7-8% (maybe 2 decades worth). China is a unique nation as is India and there are pros and cons to both styles of governance. The fact of the matter is though that China has gone through its boom phase and will now start to see relatively modest growth but it has a huge base so will still be growing impressively but will never itself return to above 8-10% growth . India still needs to go through that boom period- the foundations are there and it seems the time is now to let the Indian economy off the leash such is the efforts of the new Govt.

You also need to note the subtle difference between "China reported over 10% growth rate for 30 years" and "China achieved over 10% growth rate for 30 years".

And who wants to be china anyway. Perhaps, they set a few examples which could tell everyone, what to avoid.

 

[dray]

This is a short reply ....... ....... what will be your long reply ??

I get itchy whenever it is something to do with China, thank god I am not in control of the nukes!!

 

[Kinetic]

India can become a 10 TR economy in 10 years. We can achieve that by 8% growth and 7% rise in currency value every year for 10 years. In PPP we are already the 3rd largest economy. Now WB has said that indian currency was valued in 2005 in PPP and subject to a huge upward revision. It is totally possible that 4.5 Tr ppp valuation may rise to 6+ TR valuation. Wait for some time Many Macro economical Parameters are subject to upward revision.

Hoping for the best!



To all those I was not comparing with China, but I think we can learn a lot from China. Chinese model is not ours but still there are many things to learn.

 

[jugad]

Am not an expert but even without any of the so called 'Big ticket reforms' if we are able to achieve 5.7% GDP then imho if these reforms do happen to materialize then, gentlemen, we are poised for near double digit growths.

 

[Last Samuri]

India will replace China has the fastest growing gdp economy in the g20.after 2020..that jazz been discussed and forecasted by the west fir over a decade.

They are very accurate. They predicted India would achive 2 trillion gdp this year abd they have .