Why Economists Are Still Baffled by India’s GDP Growth

[Bilal9]

Please buy burnol from ***** .

Why should bangladesh,china or pakistan be worried about indias gdp growth ? I understand the butt hurt and heart burn. If india is doing bad, let it be so whats your problem?

Nobody's worried

What amuses us is how the Modi Govt. cooks numbers to please naive Indians.

Its all one grand plan to 'feel good' about the 'leadership' of Sanghis and garner more votes in the process....

 

[Bilal9]

Naive indians ? We can manage our country and dont need a certificate from a smelly fish about our elections or democracy.
Now f**** off and find out how many dictators bangladesh had?

Reported.

India does not have a democracy. It has a semblance of a democracy meant to prop up extremists. Enough said.

 

[Rasengan]

You are wrong, India needs 1 trillion investment not in the next decade, but in the next 5 years.

Investment rate in India is 32%, that means close to 650 billion investment just for this year, though not all of them will go to infrastructure, but we will surely achieve our investment targets. The announcement of 100 smart cities and digital India drive will surely help.

Delhi-Mumbai Industrial corridor will itself bring in 90 billion dollar of investment, thats almost double of CPEC.


And If you think, what Modi is doing are just for public consumption, how do you explain the 50% jump in FDI into India, at a time when global investors are taking their money out of emerging economies!!??

http://www.ft.com/cms/s/0/7b101156-f310-11e4-a979-00144feab7de.html#axzz3myKYSVub


Okay India needs an investment of $1.7 trillion in the next decade across infrastructure projects. The figure of 650 billion mentioned by you is that denominated in rupees of dollar, because the biggest recipient of FDI inflow was China, who this year alone received $128 billion. Investment has arisen in India, however surely if you endeavor to meet the target mentioned by you over a span of five years, then then figure of even 50% is clearly not enough. Digital India is a good step, however the execution and successful implementation is another story, when the Prime Minister has trouble in implementing land reform bills. This thread has nothing to do with Pakistan, however the truth hurts sometimes Pakistan is a much smaller country than India and we are not the one's running off our mouth's trying to compete with China in the distant future. Furthermore CPEC has four distinct phases and already the first scheme has achieved $55 billion and will increase in the next five years. However this is a separate issue to the topic we are talking on this particular thread. If you want to discuss CPEC, then participate in the Pakistan economic section of this forum.

 

[AyanRay]

Xi Jingping promised to invest $20 billion in India, when he first visited Modi in Gujarat last year and nothing has come of it. His second visit from the US has shown no concrete investment from companies, except for nice pleasant photo shoots. Only time will tell on whether the investment proclaimed from the UAE side will translate into reality. His relationship with Abe and Japan in general has been fruitful and they are willing to invest obviously in India. I am not advocating the idea that India has received no investment, however because it has skipped Rostow's third economic principle, investment in infrastructure is vital because otherwise in the next decade India will have serious structural flaws in its economy. China alone receives $124 billion of FDI, each year and India needs to emulate that.

You are confusing yourself, are you talking about total investments or just FDI. and when you are talking of structural flaws, I suppose you are specifically speaking about investment in infrastructures.
That's where you are wrong, no private investor would normally invest in the infrastructure of a foreign country, International banks, govt will give loans , but never invest directly, as they are the most riskiest of all investments. So comparing FDIs of China and India is not needed here.

The real point to note is 'how much we Indian invest' which is 32% of GDP. (BTW, if you divide 32 with 4, which is the capital conversion ratio, you get the growth rate of 8%). which is lower than China's but one of the highest in the world. (Pakistan invests just 12%. - you then divide it by 3, because Pakistan produces lower end goods than India hence more profitability, you get Pakistan's growth rate of 4%, volla).

 

[Rasengan]

You are confusing yourself, are you talking about total investments or just FDI. and when you are talking of structural flaws, I suppose you are specifically speaking about investment in infrastructures.
That's where you are wrong, no private investor would normally invest in the infrastructure of a foreign country, International banks, govt will give loans , but never invest directly, as they are the most riskiest of all investments. So comparing FDIs of China and India is not needed here.

The real point to note is 'how much we Indian invest' which is 32% of GDP. (BTW, if you divide 32 with 4, which is the capital conversion ratio, you get the growth rate of 8%). which is lower than China's but one of the highest in the world. (Pakistan invests just 12%. - you then divide it by 3, because Pakistan produces lower end goods than India hence more profitability, you get Pakistan's growth rate of 4%, volla).

I am talking about Foreign Direct Investment and when I mentioned structural flaws its related specifically to infrastructure inefficiencies that can plague India in the future, if it desires to become a manufacturing hub in competition with China. Chinese State Owned Enterprises have been successful by investing a huge amounts of capital in infrastructure projects across Africa and although it may seem risky the returns are normally high. George Osborne the British Chancellor has pitched to the Chinese to build and invest in the HS2 railway network, because obviously the project would change Great Britain. Like the financial times has mentioned in my previous message that India needs to receive $1.7 trillion in the next decade for infrastructure projects, therefore Modi needs to do much better otherwise clock is ticking Even if Government's, International Banks do gives loans for infrastructure projects, then how much has India received so far?

You have an obsession to always bring Pakistan into the picture, when the thread is clearly about India Pakistan's growth rate in 2015 was 4.2% and this was due to power shortages. The scenario will change when by 2018, Pakistan will add 10,000 MW to the grid and by 2020 our capacity in producing electricity will double. Therefore our future GDP growth will change, however stick to the topic and less not diverge.

Even the RBI’s Rajan is Confused by India’s New GDP Numbers - India Real Time - WSJ

India growth figures baffle economists - BBC News

 

[Bilal9]

Don't rush in using new GDP data for policies: Arvind Subramanian | Business Standard News

 

[Mr.Nair]

LOL, Indian members are always questioning our GDP figures.

Now the whole world is questioning India's GDP figures.

IMF to examine India’s ‘puzzling’ growth data | The Financial Express

Modi's "special revisions" did not actually change any of the underlying economic indicators, which are performing poorly as usual. It just marked up the overall growth rate significantly.

Overnight, his revisions changed India's growth rate from 4% to around 7%. But none of the actual economic indicators changed at all, they are still the same as they were when India's growth was 4%.

How dare world bank and imf didn't ask the chinese permission to fix india's gdp growth before publishing !

Next time ask chinese before fixing India's gdp,ok world bank and imf..

 

[Joe Shearer]

Let's not bring China into this - M-kay??

Have you ever been to Beijing, or Shanghai or even 3rd tier cities like Shenzhen??

There is a Chinese section in this forum - go take a look please. Comparing Bharat with China is a foolhardy exercise. It'll take you at least a couple more decades to match China in infrastructure, much less GDP. I know the RSS-ers keep thumping their collective chests - but if chest thumping equated to development then I have little to say....

Keep comparing yourselves with us (like so many WB bongs do) so you'll keep feeling better and keep hiding your head in the sand.

I've been to both China and India recently and there is no comparison. You Bhartiyas have neither the discipline, nor the work ethic, nor the vision as a large nation to pull off what China has done in the last two decades.

Don't hold your breath.

 

[Asif Durrani]

Let's not bring China into this - M-kay??

Have you ever been to Beijing, or Shanghai or even 3rd tier cities like Shenzhen??

There is a Chinese section in this forum - go take a look please. Comparing Bharat with China is a foolhardy exercise. It'll take you at least a couple more decades to match China in infrastructure, much less GDP. I know the RSS-ers keep thumping their collective chests - but if chest thumping equated to development then I have little to say....

Keep comparing yourselves with us (like so many WB bongs do) so you'll keep feeling better and keep hiding your head in the sand.

I've been to both China and India recently and there is no comparison. You Bhartiyas have neither the discipline, nor the work ethic, nor the vision as a large nation to pull off what China has done in the last two decades.

The Indians I know in the US work harder than anyone else, including the Chinese (coz they don't have to waste time doing mindless shopping on IPhones like the Chinese!!!)

The Bangladeshis also work hard, but then taxi drivers and waiters have to work hard, don't they?

 

[Bilal9]

The Indians I know in the US work harder than anyone else, including the Chinese (coz they don't have to waste time doing mindless shopping on IPhones like the Chinese!!!)

The Bangladeshis also work hard, but then taxi drivers and waiters have to work hard, don't they?

It's clear you're troll-baiting.

And I'm sorry - don't have time today.....

Interesting that a Pakistani is so full of praise for Indians.....

This kind of denigrating attitude suits a Sanghi Indian more than a Pakistani. And just joined today with 4 posts??

False-flag much?

 

[Asif Durrani]

It's clear you're troll-baiting.

And I'm sorry - don't have time today.....

Interesting that a Pakistani is so full of praise for Indians.....

This kind of denigrating attitude suits a Sanghi Indian more than a Pakistani. And just joined today with 4 posts??

False-flag much?

I am neither a whatever-you-said Indian nor am I a Pakistani citizen for that matter. My parents were Pakistanis, that's it. I have equal number of Pakistani and Indian friends - hardly any Bangladeshis coz my egalitarianism does not (unfortunately) result in walking into lower-income neighbourhoods and making friends with (mostly) non-integrated folks.

As for trolling and baiting, I think you are the one who started trolling and baiting through mock-comparisons between India and China. Showed a distinct case of schadenfreude. Why are you trying to appropriate Chinese success? Who are they to you?

As for your presumption that anyone if Pakistani origin will automatically be hostile to India, Should I even credit it with a response?

I assume that by "false-flagging" you mean I am an Indian in disguise. I am not - and you are welcome to find out.

 

[Bilal9]

I am neither a whatever-you-said Indian nor am I a Pakistani citizen for that matter. My parents were Pakistanis, that's it. I have equal number of Pakistani and Indian friends - hardly any Bangladeshis coz my egalitarianism does not (unfortunately) result in walking into lower-income neighbourhoods and making friends with (mostly) non-integrated folks.

You're trying to be a snob. That's fine. Lots of people look down on you as well.Your comments are so typical of these new H1B idiots who think they have it made and act like a snob.

Of course they never had anything in India to start with.

People who are truly wealthy don't have airs about them. Only the middle class bourgeois have that problem.

As for trolling and baiting, I think you are the one who started trolling and baiting through mock-comparisons between India and China. Showed a distinct case of schadenfreude. Why are you trying to appropriate Chinese success? Who are they to you?

It is because the Indian Govt. is trying to screw over Bangladesh at every opportunity. China is not. I don't expect you to understand. I have nothing against Indians as people however.

As for your presumption that anyone if Pakistani origin will automatically be hostile to India, Should I even credit it with a response?

You don't have to. Patriotic Pakistanis do it here everyday. If you are not a Pakistani citizen then why have that badge of honor attached to your handle? No Pakistani I know adores the current Indian Govt. (or Hindutva). It is clear you have not met a Hindutva idiot in person. You being a Pakistani are automatically the enemy.

I assume that by "false-flagging" you mean I am an Indian in disguise. I am not - and you are welcome to find out.

There is no point. Your views are proof enough.....

In any case these are off-topic discussions and have nothing to do with the subject of the thread.

 

[immortalsoul]

It's clear you're troll-baiting.

And I'm sorry - don't have time today.....

Interesting that a Pakistani is so full of praise for Indians.....

This kind of denigrating attitude suits a Sanghi Indian more than a Pakistani. And just joined today with 4 posts??

False-flag much?

some indians are so desperate.believe me, if india has some concrete achievements, the world will show respect of india.pretending to be a pakistani with loads of praise for india only shows your low IQ

 

[Dungeness]

The thing that baffles me is how India can be having such great growth for the last 20 years but their cities still look abysmal.

GDP numbers can only be credible when you can see it in reality.

I would be much more interested in how much the poorest of poor people in India are better off today than they were 20 years ago. That will be a really good indicator showing how inclusive their development is.

 

[Bilal9]

I would be much more interested in how much the poorest of poor people in India are better off today than they were 20 years ago. That will be a really good indicator showing how inclusive their development is.

Well you have to have regard for poor people. You have to have kindness in your heart for those less fortunate than you and a desire to uplift your poor so they can live for a better day. In India nobody gives two hoots for poor people who are the lower caste and minorities mostly.

They are however busy with useless showcase projects like MARS and LUNAR missions. These projects are great for ministers getting kickbacks.

The poverty reduction, sanitation improvement and micro-finance movements were started in Bangladesh more than some twenty years ago. The idea was that you have to build up your human resources along with your infrastructure - otherwise development will only benefit the rich. The gap between rich and poor is so high in the subcontinent. We all know about the horrible poverty and starving masses. At least in Bangladesh we try to do something about it.

The Nobel prize winner Amartya Sen had an interview which is very interesting (with English subtitles) where he spoke about the differences between India and Bangladesh,

I remember when I was in eighth grade I had an assignment to go to the slums to teach kids basic math. It was part of my grade. Then in tenth grade I had to buddy up with another kid from a disadvantaged family and make sure he graduated with me.

Look at infant mortality alone,

This article was published in 2012 in 'The Hindu' - a leading Daily in India by Jairam Ramesh, Union Minister for Rural Development in India back then.

Heard of the ‘Bangladesh shining’ story?

The country has shown that it is possible to have superior social outcomes at lower per capita incomes and rates of economic growth.

Bangladesh is very much in the news these days in our country, but for the wrong reasons. In the unfortunate Bangladesh-bashing that seems to have become somewhat of a pastime, we seem to have failed to notice the striking developmental success that it has had in the last few decades, compared with some high-profile Indian States.

Consider this. Bangladesh is considerably “poorer” than India going by GDP alone — its GDP per capita (adjusted for purchasing power parity) in 2010 was only $1,585, roughly half of India’s ($3,419) and less than a third of Gujarat’s ($5,098) and Haryana’s ($5,434). But how is Bangladesh doing on social dimensions compared to some of our “richer” States?

Let us start with the status of children. In almost every standard indicator of child development, Bangladesh is doing better than some of the richer Indian States.

The infant mortality rate and the under-five mortality rate in Bangladesh is better than 13 large Indian States, including much richer Indian States like Gujarat, Haryana and Himachal Pradesh.

The proportion of children that are underweight is also lower in Bangladesh compared to six Indian States, including richer Gujarat where the Chief Minister has now come up with a truly bizarre explanation for the prevalence of malnutrition there.

Interestingly, Bangladesh’s Total Fertility Rate, which measures the children born per woman, is 2.2 (which is nearly the “replacement rate”) and lower than 10 large Indian States, including Gujarat (2.5) and Haryana (2.3). Even when it comes to access to improved sanitation, Bangladesh again does better than every large Indian State other than Kerala, Punjab, Himachal Pradesh and West Bengal.

What does all this data tell us? Clearly, Bangladesh demonstrates that it is possible to have superior social outcomes at lower per capita incomes and lower rates of economic growth. There is more to social development than just GDP. So why has Bangladesh done so well?

TWO ARGUMENTS

Let us first examine the arguments of the naysayers. One set of sceptics would argue that Bangladesh simply “exports its poverty” to India, especially to our Northeast. But even if one believes the most exaggerated statistics of Bangladeshi migration to India, not more than five to six per cent of Bangladeshis seek their livelihoods in our country.

The second argument of the naysayers is that Bangladesh’s data is fudged or exaggerated by the donor community to justify its larger than life presence in the country. However, doctoring national data at such scale is simply not possible in today’s day and age of scrutiny by academics, researchers and sceptics.

So how might have Bangladesh done it? Spending has something to do with it. As Jean Drèze has argued, the public health expenditure as a proportion of the GDP in Bangladesh has been much higher than in India until a few years ago.

Another clear lesson is that grassroot institutions seem to matter. One of the major reasons for the success of Bangladesh has been social mobilisation at the local level, such as through women’s self-help groups (SHG), which has led to increased public awareness and greater accountability in service delivery. A lot of this has been facilitated by robust and effective development NGOs that have achieved scale — in fact, Bangladesh is perhaps the best case study of NGO success anywhere in the world. As scholars have argued, NGOs are involved at scale in virtually every development activity in the country, including education, health, poverty alleviation, etc. NGOs may have “broad-based” social development in Bangladesh, as some have argued, since they have primarily worked with the poor through social campaigns, but this phenomenon may be unique to Bangladesh, as state institutions may be weaker, as compared to countries like India, and NGOs may be filling up that space.

Nevertheless, there are lessons for India — effective grassroot institutions matter for service delivery. In the Indian context, financially and administratively empowering the Panchayati Raj institutions, with their 2,50,000 gram panchayats, and 30 lakh elected representatives (of which 12 lakh are women) is critical. This is not happening on any significant scale. Similarly, the 30 lakh women’s SHGs (that we hope to increase to 70 lakh in the next five years through the National Rural Livelihoods Mission — Aajeevika), could play a major role in improving social outcomes. But for this to happen, we will need to ensure that these SHGs are linked to banks and involved in service delivery, as in Andhra Pradesh.

ENHANCING CONNECTIVITY

Currently, 80 per cent of all credit to SHGs goes to the four southern States of India — Andhra Pradesh, Tamil Nadu, Karnataka and Kerala — and this needs to be broad-based nationally. In addition, we need to enhance rural connectivity — the Pradhan Mantri Gram Sadak Yojna (PMGSY), a major success in connecting habitations above 500 population with pucca roads, needs to scaled up to connect smaller habitations. Sanitation and hygiene have to undergo a veritable revolution, given their multiplier effects on reducing child mortality and malnutrition, enhancing economic productivity, and upholding the dignity of women.

Clearly we must not settle for lower GDP growth rates in India. Indeed, the data shows that there is a clear positive correlation between GDP and social development indicators. More importantly, continued high rates of GDP growth are required for generating resources to invest in health and education, and sustaining the investments on the required scale.

But what Bangladesh’s experience shows is that we don’t have to wait for that high economic growth to trigger social transformations. Robust grassroot institutions can achieve much that money can’t buy.

Heard of the ‘Bangladesh shining’ story? - The Hindu