Why Economists Are Still Baffled by India’s GDP Growth

[Asif Durrani]

Your knowledge reminds me of a peasant in a village who has no clue and intellectual understanding on the world around him. Chairman Mao was extremely famous for his poetry because most of his proverbs have deep rooted links to the scholars of the Tang Dynasty. His polices may have indirectly or directly murdered millions during the Great Leap Forward and the Cultural Revolution, however it cannot be denied that he was gifted with his poetry. Go and serve a client in your taxi in America, instead of wasting precious internet bandwidth



Now Mr. Coconut you sound like a petulant child who did not receive a lollipop from the teacher I am a proud Pakistani and I will never hide my appreciation of China, because some of my best friends who I regard as my brothers come from Chengdu, Shanghai, Kunming, Dalian, Beijing, Guangzhou, Dangdong, Suzhou ect.

1. This is your perception that the CCP government is a totalitarian regime, when clearly even within the party itself their are three main factions. The Chinese have democratic elections at the grass root level of village politics where people are elected by the people. Why Should China follow a system based on western ideology when it can implement a system based on Chinese characteristics that have been used for the last 5000 years.

2. This is where your knowledge is very limited and its best to be silent on the subject. China follows the philosophy of legalism which was introduced during Emperor Huang Di era, while Confucius is focused on morality, attitudes, behavior, manners of the general public in reference to their government. Until your tiny electron brain cannot understand this assumption, then its best to do more research on the topic. There was no difference between Chiang-Kai-Shek and Chairman Mao, because both were the students of Sun-Yat-Sen and both were totalitarian in nature.

I think you are the one over here who is acting more Chinese than the Chinese themselves. I belong to a country that includes liberals, racists, wingnuts and progressives. You are out defending the Chinese, who have there heads up their A** with notions of being the “Middle Kingdom” etc. To the Chinese you are just a lackey, nothing else. Your Chinese “brothers” think of you in much the same way as the Americans before did. You used to be an American lackey earlier, when you thought that Americans will help you with your nefarious designs of de-stabilizing the world. Now you are a Chinese lackey, harbouring the same delusion. The Americans treating you like toilet paper must have hurt, but given the nefarious nature of your designs, it was bound to happen.

Thankfully there is a large class of western-educated Pakistanis who do not wish to play your silly little games of always renting out to x or y. They understand that their future lies with the free world, not in some wannabe-superpower-which-is-a-tinpot-dictatorship-in-reality.

Now coming to your defence of Mao. Yes, I know, genocide is okay, so is totalitarianism. As I will interact with you, I will learn newer things. Next in line will be state-sponsored terrorism – how that is okay as well. I know that is coming next.
Now coming to “Chinese Democracy”. So having factions in a dictatorship takes away from its totalitarian nature, does it? Where did you learn this vital piece of info? Tianjin No.42 High School? Then it is s**t, I must say. As for village elections, who decides the contestants? And what level of policy do they make? And who gave the CPC the right to hold village elections without an election on whether the CPC should run the country in the first place?

A system based on Chinese characteristics? What system is that? Before 1912, China had been a monarchy. So if this is the old system, then why is there no monarchy? Oh wait, so you mean that President Xi is the modern-day Emperor. I understand now. But then why is it not called an empire and a Republic instead. It was not a so-called republic until the 20th century? And where did you get the figure of 5000 years? So the communist party has been in power since then? That seems like a long time to me...

Or do you mean to say that the Xia Dynasty, about which very little is actually known, operated on the same broad structure as the Qing dynasty and the CPC/President Xi? So you know how the Xia Dynasty functioned, do you? Then why don’t you share your knowledge with Anthropologists, who are sceptical of its very existence? At the very least, the emblematic traits of the Xia dynasty are the exact opposites of the Shang dynasty, did you know that? Does the Little Red Book mention that anywhere?

As for Huang Di, read a translation of Marcel Granet’s original book in French. That dude likely never existed. Okay for a second let me indulge you and assume that he did indeed exist. The claim that Huang Di introduced Legalism is typical Chinese revisionism, based on their desire to seek Han ancestry from the Yellow emperor. The earliest known mention of Legalism/Art of War/Realpolitik was after the Zhou dynasty. Also, what does it have to do with denying people their democratic rights? So somewhat miraculously, Communist despots woke up one day and realized that “Hey! His old piece of rag looks kind of useful for it justifies totalitarianism?!” Where exactly in Chinese legalism does it say that people are too stupid to form their own government?

Times have moved on, there is no civilized country in this world that is not a democracy (even notionally will suffice). The Chinese regime cannot re-write history and cannot keep fooling its people forever.

The problem with you is, being a product of a retarded education system, you hav believed in your own BS about your superior intellect. You spout a few BS statements with sufficient gravitas and since it is usually enough to fool the fellow retards around you. The advantage I have is that the education system that I had access to was so much better that I was never deluded into believing my own superiority. Your language is mediocre, your research skills are mediocre and so is the odd mis-mash of terms that you throw around in your attempt to fool others. In other words, you are a charlatan.

Now off to the Little Red Book....

Umm..Do you know a river in India catch fire?
Apologizes to you.I am sorry for writing incorrect sentence

Umm...Do you know I-don't-give-a-damn about India anymore than I do about any other country. Do you know I actually read to gain knowledge, and not just to learn innovative arguments to support Maoist BS? I also apologizes to you, for having to read your pidgin.

 

[CHN Bamboo]

I think you are the one over here who is acting more Chinese than the Chinese themselves. I belong to a country that includes liberals, racists, wingnuts and progressives. You are out defending the Chinese, who have there heads up their A** with notions of being the “Middle Kingdom” etc. To the Chinese you are just a lackey, nothing else. Your Chinese “brothers” think of you in much the same way as the Americans before did. You used to be an American lackey earlier, when you thought that Americans will help you with your nefarious designs of de-stabilizing the world. Now you are a Chinese lackey, harbouring the same delusion. The Americans treating you like toilet paper must have hurt, but given the nefarious nature of your designs, it was bound to happen.

Thankfully there is a large class of western-educated Pakistanis who do not wish to play your silly little games of always renting out to x or y. They understand that their future lies with the free world, not in some wannabe-superpower-which-is-a-tinpot-dictatorship-in-reality.

Now coming to your defence of Mao. Yes, I know, genocide is okay, so is totalitarianism. As I will interact with you, I will learn newer things. Next in line will be state-sponsored terrorism – how that is okay as well. I know that is coming next.
Now coming to “Chinese Democracy”. So having factions in a dictatorship takes away from its totalitarian nature, does it? Where did you learn this vital piece of info? Tianjin No.42 High School? Then it is s**t, I must say. As for village elections, who decides the contestants? And what level of policy do they make? And who gave the CPC the right to hold village elections without an election on whether the CPC should run the country in the first place?

A system based on Chinese characteristics? What system is that? Before 1912, China had been a monarchy. So if this is the old system, then why is there no monarchy? Oh wait, so you mean that President Xi is the modern-day Emperor. I understand now. But then why is it not called an empire and a Republic instead. It was not a so-called republic until the 20th century? And where did you get the figure of 5000 years? So the communist party has been in power since then? That seems like a long time to me...

Or do you mean to say that the Xia Dynasty, about which very little is actually known, operated on the same broad structure as the Qing dynasty and the CPC/President Xi? So you know how the Xia Dynasty functioned, do you? Then why don’t you share your knowledge with Anthropologists, who are sceptical of its very existence? At the very least, the emblematic traits of the Xia dynasty are the exact opposites of the Shang dynasty, did you know that? Does the Little Red Book mention that anywhere?

As for Huang Di, read a translation of Marcel Granet’s original book in French. That dude likely never existed. Okay for a second let me indulge you and assume that he did indeed exist. The claim that Huang Di introduced Legalism is typical Chinese revisionism, based on their desire to seek Han ancestry from the Yellow emperor. The earliest known mention of Legalism/Art of War/Realpolitik was after the Zhou dynasty. Also, what does it have to do with denying people their democratic rights? So somewhat miraculously, Communist despots woke up one day and realized that “Hey! His old piece of rag looks kind of useful for it justifies totalitarianism?!” Where exactly in Chinese legalism does it say that people are too stupid to form their own government?

Times have moved on, there is no civilized country in this world that is not a democracy (even notionally will suffice). The Chinese regime cannot re-write history and cannot keep fooling its people forever.

The problem with you is, being a product of a retarded education system, you hav believed in your own BS about your superior intellect. You spout a few BS statements with sufficient gravitas and since it is usually enough to fool the fellow retards around you. The advantage I have is that the education system that I had access to was so much better that I was never deluded into believing my own superiority. Your language is mediocre, your research skills are mediocre and so is the odd mis-mash of terms that you throw around in your attempt to fool others. In other words, you are a charlatan.

Now off to the Little Red Book....



Umm...Do you know I-don't-give-a-damn about India anymore than I do about any other country. Do you know I actually read to gain knowledge, and not just to learn innovative arguments to support Maoist BS? I also apologizes to you, for having to read your pidgin.

How about yourself?
You havent show me the evidence of the cultral revolution damage.
一言难尽 watch what you have posted before.
Having seen this kind of reply in American website,I usually tend to regard them as machine.
Not until I saw your repeatition,did I come to know that IT SHOULD BE A REAL PERSON'S REPLY.
Middle kingdom....?
Maoist?
Do you know the way to become PM/president in China?
Do you know there are few Chinese caring about politics?
If you major in politics(some other majors are also useful) in good university,then you can go into gov.
If not,care for yourself,and vote for village officials.

 

[Rasengan]

I will try to deal with your endless nonsense/ Maoist apologetics in a consolidated post.

- Shaolin monks are not in the business of defending Mao’s acolytes. If there is anything you should know about China is how their culture was systematically erased by Mao during the Cultural Revolution, so the monks would have rather liked my Mao jokes.

Seriously I can consume a whole bowl of alphabet soup and excrete out a much better response than your failure of attempt to counter-argument my previous messages. Clearly you have some comprehension issues, therefore I will recommend the advice in good faith for you to visit your local special school needs teacher. I never endorsed the political doctrine of Chairman Mao, however a simpleton fool such as yourself can never understand the concept that his poetry was magnificent. When you mock Chinese Kung Fu with your stereotypical description and show contempt to the Shaolin Monks on their country, then you can hazardous a guess that a thorougher thrashing will be awaiting for you. The Gang of Four were responsible for systematically trying to erase Chinese traditions from the Cultural Revolution and Chairman Mao at this particular time was feeble in mind and was unfit to govern the country. Henceforth there is a famous proverb in China: "Mao gave us revolution, while Deng Xiaoping put food on the table". Chairman Mao has been criticized in China and his doctrine will never come back into China. Therefore, read my message with meticulous care because you look incredibly foolish in presuming things such as calling me a Chinese, when in fact I am a proud Pakistani.

 

[Lurch Adams]

Also, what does it have to do with denying people their democratic rights? So somewhat miraculously, Communist despots woke up one day and realized that “Hey! His old piece of rag looks kind of useful for it justifies totalitarianism?!” Where exactly in Chinese legalism does it say that people are too stupid to form their own government?

There is more than one way to govern the world and there is no necessity to imitate antiquity, in order to take appropriate measures for the state... One should, in one's plans, be directed by the needs of the times - I have no doubts about it.

The Book of Lord Shang "Reform of the Law

The CPC are masters of spin and historical revisionism to suit their own purposes. They spin whatever story is needed to keep their unlawful, totalitarian dictatorship alive.

 

[Rasengan]

- Dalian is an overgrown place like any other Chinese city, with dust from non-stop construction everywhere. I was told that for small mercies many projects were stalled at the time I went there due to the impending doom of yet another Chinese bubble, this time the one in real estate...

I will provide a simple test to determine whether you have actually visited Dalian, because obviously your description of the city is erroneous and this is probably due to listening to fox news. What is the distinctive characteristic of Dalian citizens which make them so different to their fellow comrades in other cities and provinces in China? The answer should be a piece of cake, because you have proclaimed in your previous post you have actually visited the city. Dalian is famous for its beeches and has fantastic aquarium parks and its one of the most prime locations where retired generals normally live. Did the tooth fairy come in your dream and tell you that Dalian had many real estate projects which became stalled due to the impending doom of a Chinese bubble? Clearly you knowledge is zilch because Dalian Wanda Group has made tremendous amount of money and now they are looking to expand abroad, by even doing some projects in India.

- Linking a site that lists polluted cities does not tell you the simple fact that these cities are NOWHERE as polluted as Chinese cities are. Very deceitful of you, but entirely expected.
- Yes, i have been to India, and it is also polluted as hell. But part of the blame lies in their misplaced enthusiasm in aping a development model (read: Chinese) whose time has long gone, and which is collapsing right in front of our eyes.
- As for the rest of your China-build-road and China-build-railway gobblygook, congrats for building some roads and railways 150 years past due date.
- .

You were arrogantly preaching the sermon to me on the concept that Chinese cities are polluted and undoubtedly this statement can be correct in some instances, however you are a hypocrite because America also has the same problem where 40% of the population breaths in harmful air. The only deceitful individual who has an identity crisis is you, who love to spit shine the shoes of his white aristocratic masters. Its hilarious hearing your cesspit of analysis on the Chinese development model, when the western world itself during the industrial revolution was prone to use coal to generate electricity. The Chinese have followed a similar pattern and it clearly falls in line with Rostow's five economic principles of growth, which every country in this world can be categorized into those phases. If you wish to criticize the Chinese, then you must do a better job since your knowledge is quite frankly dismal. How exactly is the Chinese model collapsing in front of our eyes, when the largest recipient of FDI last year was the Chinese when they received an inflow of $128 billion in investments. Also the British Chancellor did not grovel to the American's in building and funding the HS2 network, that would connect Birmingham to London, instead he pleaded with the Chinese because their technology and efficiency even beats the Japanese in this sector. The same scenario is being played out in Indonesia, where the Chinese are winning the race to build a HS train. Henceforth, the amusement show provided by you is fantastic. The rest of your gibberish nonsense, I will reply later.

 

[immortalsoul]

Stop spewing jargon without any basis. Keep India in check on what? What is Bangladesh's strategic objective against India for which it needs to become a client state of China? Or is it simply a matter of your religious zealotry raising its ugly head now. "Partners"...yeah right! Do you even know who you are dealing with? How the Chinese regime views weak countries like Bangladesh. The Chinese regime understands no language other than the language of power, which a country like Bangladesh will take another generation to learn. In the meanwhile, all you can do is be rented out as proxies. You are beyond pathetic.



I will respond to you if you speak in English, coz I don't understand this pidgin you speak.

so you kown china well?Bangladesh is a developing country, so is china.
as for india, no one will respect superpower-daydreaming big mouth.

 

[Dungeness]

There are also Pew research polls that show how Chinese people resent their totalitarian government. I don't see you posting those....

The fact that you post a quote from Tinpot Mao, murderer of 45 million Chinese, tells me all I want to know. Now go away Chinese autobot!!!

..

You are seriously outdated and stuck deep in the mentality that shaped by the west propaganda of cold war era and by some so called Chinese political dissidents whose solo purpose of life is to topple current Chinese regime for their own gains. Please check the declassified CIA report on China's famine during "Great Leap Forwards" of 1958-1961, which your story of "murderer of 45 million Chinese" was based on, and be prepared for a few heavy slaps on the face.

"The only thing that is worse than being brainwashed, is believing yourself immune to being brainwashed."

Here is the link: http://www.foia.cia.gov/sites/default/files/document_conversions/89801/DOC_0001098172.pdf

 

[homagnibhatt]

I don't know which country you are living in. But 9% growth rate is not easy. The finance ministry never said a 10% growth rate is in the offing. No economist or investor of any recognition said 10%. So please don't add your masala. Also it is generally accepted that the growth bump India got was because of low inflation more than industrial growth which actually slowed down. And no one is 'stunned' by it. There were optimists who were looking at 8% may be, but show me a guy who predicted 10% growth rate for India last quarter.

Aside from this, India's GDP and its calculation procedures have got serious issues. This is not the first time analysts and statisticians casted doubts over the numbers. India also recently adjusted the base year for these calculations which seem to be some sort of harakiri on the numbers. The growth figures are not just confusing, they are illogical by many accounts.

Not my opinion.I quoted an contrarian opinion which happens to be of Surjit Bhalla,a well known economist. If you have any solid points to offer against Mr. Bhalla's assertion, please do so. Or just stop ranting.

Regarding India's new GDP numbers, Kaushik Basu, Chief Economist of World Bank finds it more reliable, if not perfect.

New GST can remove a lot of wastage: Kaushik Basu, chief economist of World Bank - timesofindia-economictimes

New GST can remove a lot of wastage: Kaushik Basu, chief economist of World Bank
Seema Sirohi, ET BureauAug 6, 2015, 04.00AM IST

• 

("India’s new GDP figures capture…)
Kaushik Basu, senior vice president and chief economist of the World Bank, has first-hand experience working in North Block having served as India's chief economic advisor from 2009 to 2012. His forthcoming book, An Economist in the Real World, is based on a ringside view of those India days. As the bank's chief economist, Basu closely follows Indian economic policies, ET interviewed him in Washington.

What do you think of India's new GDP figures? Do you find them believable?

Contrary to what some critics have said, India's new GDP figures are better and more reliable. They capture the value added in the manufacturing sector more comprehensively than in the past and, as such, provide better data. This is not to deny that, as with all macroeconomic indices, there is a margin of error. But data collection and collation in India is a sufficiently transparent exercise that makes deliberate data manipulation extremely unlikely.

The Modi government is concerned about India's ranking (142nd among 189 countries) in the World Bank's Ease of Doing Business index. It claims the examples used by the bank are skewed against India. What is your response?

The World Bank's Doing Business indicator uses the same yardstick to evaluate 189 countries. Using the same yardstick is the fair thing to do, but it also creates a straightjacket. This is unavoidable in multi-country studies. What is important is that it does give useful information about the business ethos of a nation. Anyone who knows India knows of the large transactions costs for doing business. Hence, there is no surprise that India does poorly on this ranking. It is good to see the Indian government wanting to change this. Cutting down bureaucratic costs is one measure that can singlehandedly boost India's growth. I should emphasise that no modern economy can run efficiently without regulation. Hence, a good business ethos does not mean an absence of regulation but a regulatory system that is transparent and quick.

Are the rankings based on surveys of actual businessmen? Also, is the bank randomising the information?

The data for Doing Business are not collected through statistical samples or randomisation methods. This in itself is not a problem because the bulk of it pertains to the actual law. What are the de jure requirements to start a business, have a contract enforced, get electricity connection and so on? There are limitations to this method and we are trying to make improvements. We instituted several changes last year and there is more to come. The data used to be collected from one city in each country. We have now added a second city for all countries with more than 100 million population. I would love to expand this further, but data collection is a very expensive activity. In valuing the ease of getting electricity, the focus used to be entirely on the cumbersomeness of getting a connection for a small new enterprise. We now also look at the regularity and dependability of the supply.

Do you think this ranking is a powerful tool, which encourages countries to improve, or does it end up being an exercise in naming and shaming?

It is a powerful tool, with the risk that countries at times try to game the system and make changes only in the areas tracked by Doing Business. To a certain extent this is unavoidable. American universities do the same to improve their rankings. But the right thing to do is to take the spirit of this exercise and use it to improve the efficiency of government bureaucracy, whether that improves your rank.

In your opinion what are the three or four top reforms India needs most urgently?

Governments need to focus attention on providing better infrastructure and basic welfare — food, health services, education — to the poor. For both these, attention has to be paid to the details of fiscal policy. India's tax GDP ratio is too low. Even a two or three percentage point increase in this can do wonders in terms of better roads, better toilet facilities, electricity connectivity for all and the provision of basic services to the poor. On the economic policy front, if these can be delivered, the rest will follow automatically. There is enough enterprise and creativity in India. It is good to see government taking initiatives on many of these fronts. The last Budget saw some important moves for which the finance minister deserves credit. Take the proposed Goods and Services Tax (GST). Our analysis shows that when freight moves by truck from one Indian city to another, 60% of the time is spent stationary, and the bulk of this occurs at check posts to pay various taxes and do paperwork. This is a shocking waste. The new GST can remove a lot of such wastage
There are other initiatives which go beyond economic policy but are important. There must, for instance, be an effort to share prosperity and make India a more inclusive society, where people of different castes and religions, and minority groups and people of different orientations all feel a part of society and sense of belonging to India. This is not just the morally right thing to do; it is something that can nurture creativity and promote development.

Purely in terms of growth, India has done well over the last decade. Earlier this year, the World Bank, for the first time, predicted that India would actually be leading the growth chart among all major economies in the world, including China. The forecast, while based on large data analysis, was nevertheless made with some trepidation. In the first quarter of this year, India did actually grow faster than China, and the forecast seems headed to being right. China has done phenomenally well for three decades. With reforms and inclusive policies, India could do the same.

Which of the programmes that India is implementing to reduce poverty is the most efficient? In this context, will Aadhaar help?

It is the government's responsibility to provide certain basic amenities, such as healthcare, education and essential food to the disadvantaged. Aadhaar can be a game-changer. It facilitates delivery of benefits to the poor directly, often by simply enhancing their buying power. It will also mean that you don't have to remain in your village to get the benefits you are entitled to. Wherever you go you can establish your identity and be fully functional. This can empower workers and help make India a more dynamic economy.

How can India cushion itself from disruption resulting from advanced countries exiting quantitative easing?

This is a risk that all emerging economies face. It is a part of globalisation. I am not suggesting we should resist globalisation. Indeed, I believe globalisation provides huge opportunities. India should welcome it and at the same time build resilience. It is a testimony to India's growing economic might that it has overall weathered global turbulence well. But it needs to do more. One mistake India made, in retrospect, was not to build larger foreign exchange reserves over the last few years. The reserves rose sharply from 1993 to around 2008 but then flattened out. This was a mistake. India should try to build reserves, at least as long as other countries do. This will boost exports and make the economy more resilient to global shocks. The Reserve Bank has made some deft moves along these lines in recent times and that is welcome.

How does the World Bank look at the BRICS Bank and the resultant competition in mediating global capital to developing country infrastructure?

The World Bank has grown since 1944 but global financial needs have grown much more. Hence, the arrival of the new banks is welcome. They should join us in providing more resources to where they are needed.

How should India deal with the two looming trade pacts led by the US neither of which includes India? These two pacts are both geopolitical and economic moves. India says these are protectionist.

I have studied the Trans-Pacific Partnership and believe that, on balance, it is a good initiative, even though it has recently run into heavy weather. It is not meant to be a move to build trade barriers against other countries but an attempt to remove trade barriers among the 12 or so nations involved. If this strengthens these nations and boosts their demand, that will be good for India. This is not to deny that there are some matters of detail which are of concern, such as the effort to put up barriers against generic drugs. This can hurt India, and hurt ordinary citizens of the nations in the Partnership even more. Such clauses should be resisted. But, overall, the agreement is not a matter of concern for India.

 

[AndrewJin]

Recently changed a lot,thx.
※However,India remain what it is,dirty air and polluted water.

India is heavily polluted before major industrialisation.

 

[Luca1]

India is heavily polluted before major industrialisation.

It can focus on environmental science. Before industrialization.

India need to clean up its air and water before building more factories.

 

[ito]

There is no baffling here. The previous GDP calculations didn't reflect the complexity of Indian economy as the new method is doing. There are lot of non traditional sectors such as technology that are growing faster than the traditional sectors. The new method takes this into consideration.

 

[Bilal9]

Not my opinion.I quoted an contrarian opinion which happens to be of Surjit Bhalla,a well known economist. If you have any solid points to offer against Mr. Bhalla's assertion, please do so. Or just stop ranting.

Regarding India's new GDP numbers, Kaushik Basu, Chief Economist of World Bank finds it more reliable, if not perfect.

New GST can remove a lot of wastage: Kaushik Basu, chief economist of World Bank - timesofindia-economictimes

New GST can remove a lot of wastage: Kaushik Basu, chief economist of World Bank
Seema Sirohi, ET BureauAug 6, 2015, 04.00AM IST

• 

("India’s new GDP figures capture…)
Kaushik Basu, senior vice president and chief economist of the World Bank, has first-hand experience working in North Block having served as India's chief economic advisor from 2009 to 2012. His forthcoming book, An Economist in the Real World, is based on a ringside view of those India days. As the bank's chief economist, Basu closely follows Indian economic policies, ET interviewed him in Washington.

What do you think of India's new GDP figures? Do you find them believable?

Contrary to what some critics have said, India's new GDP figures are better and more reliable. They capture the value added in the manufacturing sector more comprehensively than in the past and, as such, provide better data. This is not to deny that, as with all macroeconomic indices, there is a margin of error. But data collection and collation in India is a sufficiently transparent exercise that makes deliberate data manipulation extremely unlikely.

The Modi government is concerned about India's ranking (142nd among 189 countries) in the World Bank's Ease of Doing Business index. It claims the examples used by the bank are skewed against India. What is your response?

The World Bank's Doing Business indicator uses the same yardstick to evaluate 189 countries. Using the same yardstick is the fair thing to do, but it also creates a straightjacket. This is unavoidable in multi-country studies. What is important is that it does give useful information about the business ethos of a nation. Anyone who knows India knows of the large transactions costs for doing business. Hence, there is no surprise that India does poorly on this ranking. It is good to see the Indian government wanting to change this. Cutting down bureaucratic costs is one measure that can singlehandedly boost India's growth. I should emphasise that no modern economy can run efficiently without regulation. Hence, a good business ethos does not mean an absence of regulation but a regulatory system that is transparent and quick.

Are the rankings based on surveys of actual businessmen? Also, is the bank randomising the information?

The data for Doing Business are not collected through statistical samples or randomisation methods. This in itself is not a problem because the bulk of it pertains to the actual law. What are the de jure requirements to start a business, have a contract enforced, get electricity connection and so on? There are limitations to this method and we are trying to make improvements. We instituted several changes last year and there is more to come. The data used to be collected from one city in each country. We have now added a second city for all countries with more than 100 million population. I would love to expand this further, but data collection is a very expensive activity. In valuing the ease of getting electricity, the focus used to be entirely on the cumbersomeness of getting a connection for a small new enterprise. We now also look at the regularity and dependability of the supply.

Do you think this ranking is a powerful tool, which encourages countries to improve, or does it end up being an exercise in naming and shaming?

It is a powerful tool, with the risk that countries at times try to game the system and make changes only in the areas tracked by Doing Business. To a certain extent this is unavoidable. American universities do the same to improve their rankings. But the right thing to do is to take the spirit of this exercise and use it to improve the efficiency of government bureaucracy, whether that improves your rank.

In your opinion what are the three or four top reforms India needs most urgently?

Governments need to focus attention on providing better infrastructure and basic welfare — food, health services, education — to the poor. For both these, attention has to be paid to the details of fiscal policy. India's tax GDP ratio is too low. Even a two or three percentage point increase in this can do wonders in terms of better roads, better toilet facilities, electricity connectivity for all and the provision of basic services to the poor. On the economic policy front, if these can be delivered, the rest will follow automatically. There is enough enterprise and creativity in India. It is good to see government taking initiatives on many of these fronts. The last Budget saw some important moves for which the finance minister deserves credit. Take the proposed Goods and Services Tax (GST). Our analysis shows that when freight moves by truck from one Indian city to another, 60% of the time is spent stationary, and the bulk of this occurs at check posts to pay various taxes and do paperwork. This is a shocking waste. The new GST can remove a lot of such wastage
There are other initiatives which go beyond economic policy but are important. There must, for instance, be an effort to share prosperity and make India a more inclusive society, where people of different castes and religions, and minority groups and people of different orientations all feel a part of society and sense of belonging to India. This is not just the morally right thing to do; it is something that can nurture creativity and promote development.

Purely in terms of growth, India has done well over the last decade. Earlier this year, the World Bank, for the first time, predicted that India would actually be leading the growth chart among all major economies in the world, including China. The forecast, while based on large data analysis, was nevertheless made with some trepidation. In the first quarter of this year, India did actually grow faster than China, and the forecast seems headed to being right. China has done phenomenally well for three decades. With reforms and inclusive policies, India could do the same.

Which of the programmes that India is implementing to reduce poverty is the most efficient? In this context, will Aadhaar help?

It is the government's responsibility to provide certain basic amenities, such as healthcare, education and essential food to the disadvantaged. Aadhaar can be a game-changer. It facilitates delivery of benefits to the poor directly, often by simply enhancing their buying power. It will also mean that you don't have to remain in your village to get the benefits you are entitled to. Wherever you go you can establish your identity and be fully functional. This can empower workers and help make India a more dynamic economy.

How can India cushion itself from disruption resulting from advanced countries exiting quantitative easing?

This is a risk that all emerging economies face. It is a part of globalisation. I am not suggesting we should resist globalisation. Indeed, I believe globalisation provides huge opportunities. India should welcome it and at the same time build resilience. It is a testimony to India's growing economic might that it has overall weathered global turbulence well. But it needs to do more. One mistake India made, in retrospect, was not to build larger foreign exchange reserves over the last few years. The reserves rose sharply from 1993 to around 2008 but then flattened out. This was a mistake. India should try to build reserves, at least as long as other countries do. This will boost exports and make the economy more resilient to global shocks. The Reserve Bank has made some deft moves along these lines in recent times and that is welcome.

How does the World Bank look at the BRICS Bank and the resultant competition in mediating global capital to developing country infrastructure?

The World Bank has grown since 1944 but global financial needs have grown much more. Hence, the arrival of the new banks is welcome. They should join us in providing more resources to where they are needed.

How should India deal with the two looming trade pacts led by the US neither of which includes India? These two pacts are both geopolitical and economic moves. India says these are protectionist.

I have studied the Trans-Pacific Partnership and believe that, on balance, it is a good initiative, even though it has recently run into heavy weather. It is not meant to be a move to build trade barriers against other countries but an attempt to remove trade barriers among the 12 or so nations involved. If this strengthens these nations and boosts their demand, that will be good for India. This is not to deny that there are some matters of detail which are of concern, such as the effort to put up barriers against generic drugs. This can hurt India, and hurt ordinary citizens of the nations in the Partnership even more. Such clauses should be resisted. But, overall, the agreement is not a matter of concern for India.

Someone is asking the opinion of an Indian Govt. WB Bong 'expert' Lackey appointed to the Neocon-run World Bank on how 'Shining' Indian economy is. I think I've had enough of a dose of 'credibility' for now.

Stop spewing jargon without any basis. Keep India in check on what? What is Bangladesh's strategic objective against India for which it needs to become a client state of China? Or is it simply a matter of your religious zealotry raising its ugly head now. "Partners"...yeah right! Do you even know who you are dealing with? How the Chinese regime views weak countries like Bangladesh. The Chinese regime understands no language other than the language of power, which a country like Bangladesh will take another generation to learn. In the meanwhile, all you can do is be rented out as proxies. You are beyond pathetic.

You're asking why we need a gosh-darned Anti-India strategy Mr. 'Hiding under the covers' / 'wannabe' Indian?

Is forty years of screwing over that Bangladesh got, not enough??

If Indians can treat their so called 'friend' and next-door neighbor Bangladesh in this manner, mercilessly (illegally) killing people at the border, cutting off river water, setting up illegal dams, manipulating politics in Bangladesh - and other such instances of 'friendly gesture', then do we need 'friends' like this as a development partner?

We've all been to India and have seen India's starving millions and how royally effed up their societal situation is and how they manage their country. People drinking dirty sewer water, defecating in the open by the hundreds...

We watch videos everyday how militant Hindu communal mobs go around terrorizing Christians and Muslims and your effed up law-n-order authorities just standby like losers and watch. How can India be an example of development for us when we handle every one of these things better than you?

Is it strange that as a nation we will naturally choose the Chinese as our development partners and friends?

At least the Chinese don't lie at every breath, cheat at every opportunity (especially in trade) and try as a country to destabilize ours like India.

Please try to make your country less effed up than it is - we will gladly emulate you. But we as a nation aren't holding our collective breaths.

As the renminbi stabilizes, Chinese exports will become more expensive. Who will buy Chinese then, considering China makes very little of advanced goods and services with low demand elasticity.

Um - do cows drop dead because the vulture wishes so?

'Very little of advanced goods and services with low demand elasticity'?

What rock have you been living under Mr. Non-techie?

If not for assembled Chinese parts - none of your local cellphone brands would be reality. Chinese networking / cellphone products are world-leaders. They make everything in China. In fact they are in use in every Indian cellphone tower that I know of. Yes every cellphone tower. They were such a success that the Western suppliers (Cisco) finally paid off Indian ministers to ban Chinese Huawei equipment under Bullsh*t 'security' pretexts. While in Bangladesh we've been doing fine with them for the last decade.

And is there an Indian networking equipment manufacturer? seven layer circuit board manufacturer? chip foundry? Do I hear crickets? Chirp-chirp. I think I do.

China is the number one supplier of Power engineering equipment in India. Indian mfrs. can't sell their products anymore and are crying for non-tariff barriers like the whining idiots they are.

The Chinese make all sorts of local high-tech and bio-tech devices including pacemakers and robotics. Read up or Google it before you comment. That tired old saw that the Chinese only make 'junk' is no longer true. Manufacturing in China has moved up.

Which your India will need another two decades just to emulate...

What is this “fiscal expansion” you talk about? Have you no sense that Central Banks create money as and when they feel like, the only restriction being inflation and faith in the currency itself.

You're probably talking about the US treasury, which is not part of the govt. by the way.....

You were arrogantly preaching the sermon to me on the concept that Chinese cities are polluted and undoubtedly this statement can be correct in some instances, however you are a hypocrite because America also has the same problem where 40% of the population breaths in harmful air. The only deceitful individual who has an identity crisis is you, who love to spit shine the shoes of his white aristocratic masters. Its hilarious hearing your cesspit of analysis on the Chinese development model, when the western world itself during the industrial revolution was prone to use coal to generate electricity. The Chinese have followed a similar pattern and it clearly falls in line with Rostow's five economic principles of growth, which every country in this world can be categorized into those phases. If you wish to criticize the Chinese, then you must do a better job since your knowledge is quite frankly dismal. How exactly is the Chinese model collapsing in front of our eyes, when the largest recipient of FDI last year was the Chinese when they received an inflow of $128 billion in investments. Also the British Chancellor did not grovel to the American's in building and funding the HS2 network, that would connect Birmingham to London, instead he pleaded with the Chinese because their technology and efficiency even beats the Japanese in this sector. The same scenario is being played out in Indonesia, where the Chinese are winning the race to build a HS train. Henceforth, the amusement show provided by you is fantastic. The rest of your gibberish nonsense, I will reply later.

This is all Mr. Durrani's (nice pick of a name) jealousy at China's success. I'm holding my breath for Indian 'clean' eco-friendly development model. NOT!

so you kown china well?Bangladesh is a developing country, so is china.
as for india, no one will respect superpower-daydreaming big mouth.

You only have to visit India's filthy train stations and the toilets in them. It is sad that everyday Indians acknowledge the true sad state of their country when these new breed of big-mouth Indian Internet braggarts think they can make India a superpower just by bragging and thinking no one has eyes and can't see. If I start posting pictures then we will see where the real India is.

At least in Bangladesh we don't delude ourselves by planning to employ white slaves in another decade.

@damiendehorn, @mb444, @iajdani

 

[Dungeness]

- Yes, i have been to India, and it is also polluted as hell. But part of the blame lies in their misplaced enthusiasm in aping a development model (read: Chinese) whose time has long gone, and which is collapsing right in front of our eyes.
- As for the rest of your China-build-road and China-build-railway gobblygook, congrats for building some roads and railways 150 years past due date...

Interesting! Now you are blaming India's pollution on China? This is the most absurd accusation on China I have ever heard, not even from the most extreme Indian Internet warriors on PDF! Good job, congratulations, you've just created an unprecedented logic in the history of mankind! Indian internet warriors should pick a leaf from your book!

Just exactly what India has learnt from China in terms of the magnitude of industrialization that warrant the pollution level that beyond China's reach?

Wondering what China or Chinese have done to you so that you hate China so much?

 

[Shotgunner51]

India is heavily polluted before major industrialisation.

Exactly, with a GDP per capita lower than Sub-Saharan Africa, pathetic level of industrialization, such pollution is enormous. Too much malnourished poverty squeezed into a small slum with bad sanitation.

 

[Chinese-Dragon]

Wondering what China or Chinese have done to you so that you hate China so much?

He hates China because we defeated them in 1962, and like other Indians he thinks that China gave nuclear weapons to Pakistan.