MEET INDIA - Paris presentation -Mohan Guruswamy
- 1. Modern India now has over 2000 ethnic groups. Modern Indian languages have evolved from all the world’s four language families. Indo-European, Dravidian, Austro-Asiatic and Tibeto-Burman. India has 1652 individual mother tongues. 30 languages are spoken by over a million each, and 122 by over 10,000 each. India has almost 1.2 billion people, and the Union of India consists of 32 States and Union Territories. The biggest of these is Uttar Pradesh with a population of 199.6 million or 16.49% of India’s. It is as big as Brazil. The smallest political unit is Lakshadweep which has just 64,000 (0.01%) In late 2012 India became the world’s third largest economy in PPP terms and has grown at an average rate of over 7.4% during 2004-14 and GDP from about $750 bn to $2 trl. Between 2008-11 it grew at more than 9%. In consonance with global trends India’s growth also has tapered off these past two years. Clearly it’s a country of great heterogeneity, complexity and promise. Its diversity makes it unsuitable for any other form of government but a very raucous DEMOCRACY. 06/13/16Mohan Guruswamy 1 Meet India!
- 5. 06/13/16Mohan Guruswamy 5 The major contributors to WGDP growth 2000-10
- 6. 06/13/16Mohan Guruswamy 6 Who contributes how much to world growth 2010-19.
- 8. 06/13/16Mohan Guruswamy 8 But a fast take-off for India!
- 9. 06/13/16Mohan Guruswamy 9 Why everybody is excited about India?
- 12. India’s rising youth (16-34 yrs) cohort 2000-2030. 06/13/16Mohan Guruswamy 12
- 13. Is this the right education? 06/13/16Mohan Guruswamy 13
- 15. India’s burgeoning middle-class. 06/13/16Mohan Guruswamy 15
- 16. India’s late surge! 06/13/16Mohan Guruswamy 16
- 20. Not a bad performance at all! 06/13/16Mohan Guruswamy 20
- 26. 06/13/16Mohan Guruswamy 26 Banking crisis.
- 29. 06/13/16Mohan Guruswamy 29 Former central bank governor Dr Y V Reddy once quipped that while the future is always uncertain, in India even the past is uncertain, given how often the government revises economic data. Even by that standard, however, the dramatic upward revision of the GDP growth rate raises questions about the credibility of data emanating from Government and is fast making the CSO a bad joke.
- 30. Manufacturing has grown at 8.1 per cent at current prices. This is not matched by the growth in the Index of Industrial Production (IIP), which is only 2.4 per cent. It is hard to explain how manufacturing growth has been so strong when exports as a whole have contracted. The Centre for Monitoring Indian Economy has pointed out, a big chunk of the growth in 2015-16 has come from an item called ‘discrepancies’ in the CSO’s statistics (in plain language, an item about which we know little). Of the growth of 7.6 per cent in 2015-16, 2.4 percentage points were accounted for by ‘discrepancies’. In 2014-15, the same item accounted for 0.1 percentage points out of growth of 7.2 per cent. Compare 2014-15 and 2015-16 after leaving out ‘discrepancies’ and the growth rate figures are: 7.1 per cent and 5.2 per cent. It is hard to be jubilant about something you don’t quite understand. 06/13/1630Mohan Guruswamy
- 31. Lower oil prices translate into higher private consumption. The mid-year review estimated the boost to growth from higher private consumption at 1-1.5 percentage points, assuming that oil prices through the year would average $50 per barrel. The Economic Survey estimated oil prices for 2016-17 to be $35 per barrel. This assumption threatens to be undone. Oil prices have already moved up to $50 per barrel. If they stay at this level, there is every prospect that the gains in 2015-16 on account of falling oil prices would be absent. The Pay Commission hike could contribute about 0.6 per cent of the GDP depending on how much of it is fully paid out in 2016-17. A better monsoon could add about 0.3 percentage points. Why 7% is such a high mountain? 06/13/1631Mohan Guruswamy
- 34. Sector-wise FDI inflows into India. 06/13/16Mohan Guruswamy 34 Sector Amount in Rs. Crores Percentage Information Technology 2449.32 20.21 Telecommunications 531.95 4.39 Fuels (Power & Oil Refinery) 520.94 4.30 Transportation Industry 1417.13 11.70 Manufacturing 3213.02 26.52 Services 1823.86 15.05 Agriculture 107.86 1.00 Miscellaneous 2053.26 16.94 Grand Total 12117.36 100 Source: Rajya Sabha Unstarred Question No. 2341, dated on 23.03.2005.
- 35. Share of FDI in China in Various Sectors. 06/13/16Mohan Guruswamy 35 Sector Share % Agriculture and Mining 2.73 Manufacturing 70.95 Real Estate and Construction 11.08 Lease & Business Service 4.66 Production & Supply of Power, Gas & Water 1.87 Transport, Warehousing, Posts & Telecommunication 2.10 Information and Technology 1.51 Miscellaneous Services Sector 5.10 Source: Foreign Investment Department, Ministry of Commerce, People’s Republic of China.
- 36. India’s Investment closing in on China’s (% of GDP). 06/13/16Mohan Guruswamy 36
- 39. Centralization in India: Administrative Expenditure. Central Govt. expenditure State Govt. expenditur e Local Authorities Central Govt. share in Total Administrative Expenditure (%) (in Rs. Crores) 1960 365 525 141 35.00 1965 990 881 339 44.80 1970 1514 1540 630 41.10 1975 3072 2935 993 43.89 1980 4589 6029 1702 37.25 1985 11112 13075 3047 40.80 1990 22815 28653 6410 39.42 1995 44850 55746 12746 39.57 2000 99965 120190 27250 40.41 2004 101045 141334 32535 38.10 06/13/16Mohan Guruswamy 39
- 40. Decentralization in China Source: Chinese Statistical Yearbook 2005 27.720592.817894.082004 30.117229.857420.102003 28.97672.583125.601998 28.33330.241312.061993 31.51935.01888.771989 53.9649.90759.601983 47.4589.90532.101978 55.6359.45449.331973 61.3138.35219.491968 57.9139.74192.311963 44.3223.14177.221958 73.957.16162.051953 (100 million yuan) Share of Cental Govt. Expenditure in total expenditure (%) Local Govt. Expn. Central Govt. Expn. Year 06/13/16Mohan Guruswamy 40
- 41. Central Govt. salaries % GDP 06/13/16 41 Mohan Guruswamy
- 47. Reform & Perform or Perish. Industrialize to create jobs. Educate and vocationalize youth for jobs in industrial sector. Reduce undersupply. Invest in irrigation to reduce ecological damage and increase farm productivity. Consolidate holdings. Build infrastructure. Eliminate Roads. Ports and Railway bottlenecks. Speed reforms to make power sector profitable and investment worthy, labor productive and India investment friendly. Address regional inequality issues. Cut down subsidies. Reform government and decentralize. 47 06/13/16Mohan Guruswamy
- 48. 06/13/16Mohan Guruswamy 48 The Buland Darwaza or Gate to Greatness at Fatehpur Sikri.
- 49. 06/13/16Mohan Guruswamy 49 International Trade as a % of GDP.
Editor's Notes
- #35: Concentration of FDI in Services is not necessarily a good thing. Manufacturing creates jobs. The industrial sector in China employs 22% of its total labour force and accounts for over 50% of its GDP. In India, however, only 17% of the labour force is part of the industrial sector and it only accounts for around 26% of GDP services sector does not have a similar employment effect, largely for the skilled workforce. As of 2002, according to NASSCOM figures, IT only employed 820,000 personnel or about 1.8% of the workforce. By 2008, this is only going to increase to 2 million.
- #36: One important reason for the large share of FDI into China going to the manufacturing sector is its efficient and competitive labour market The average labour cost in China was about $ 729 per year during 1994-99. In India, the corresponding figure was much higher at $ 1192 indicating an advantage for China in terms of lower labour costs. However, recent reports suggest that this advantage is largely going down