The Indian Economy Blog

May 19, 2007

The Future Past

Filed under: Growth — Atanu Dey @ 11:30 am

Flashback

The year is 2020. For nearly 12 years, India has seen an average annual GDP growth rate of over 12 percent more than quadrupling the per capita GDP from US$500 in 2008 to $2000, placing India in the league of middle-income economies. Stark poverty is a thing of the past. In much less than a generation, the population transitioned from being 70 percent rural to being less than 20 percent rural. Agricultural labor is only 15 percent of total labor participation, down from 60 percent in 2008. Farm incomes are six times what they used to be. The $3 trillion economy shows no signs of slowing down.

So how did this seemingly impossible transformation happen, I asked the man on the street.

“The cities. I am hazy about the details but it appears that there was a change of tack. Somehow they figured that they had to think different, think big. They had been stuck in a rut created by a poverty of imagination. The problem was that there was no compelling vision to light a fire in the bellies of the hundreds of millions of people. Then somehow inexplicably they got out of the rut.”

Can you be a bit more specific? What was the turning point? What did they specifically do? What made the difference? Who was responsible?

“I was coming to that. Like I said it was the cities. But that was just the instrument, just the visible part of the transformation. The creation of the cities was the equivalent of the challenge to land a man on the moon. Remember all that talk about an Indian manned mission to the moon? Well, how lunatic was that? Nothing new in attempting to do in 2012 what the Americans had done over 40 years ago. Not just that, with all their trillions of dollars, the Americans themselves thought it was a pointless waste of money to keep doing manned missions to the moon. And incredibly, impoverished India was willing to spend a few billion dollars repeating that. I ask you, how retarded is that?”

Why drag in all this talk about missions to the moon?

“Actually, think about it for a second. The challenge that JFK presented to the nation was the important bit. Recall his words. Quote: We choose to go to the moon. We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to win, and the others, too. Unquote. You must read that speech to get a sense of what the articulation of a real vision is all about.

“The bit about doing something not because it is easy but because it is hard is important. And the bit about choosing. The operative word is “choosing” – you choose to do this as opposed to that. The Indian movers and shakers finally woke and decided to choose. It was a choice. They thought through what the options were and then made a choice to do what made the most sense. And the choice they made best organized their resources and their skills.”

But tell me, how did it all begin?

“I am coming to that.”

[Continue reading the next part.]

Flashback (Part 2)

“It began with a simple realization that no one is as smart as we are. That is, a collection of very smart people is smarter than any one person however smart. Experts and expertise matters, and therefore amateurs and novices cannot be as good in figuring out the choices that confronted them. The collective wisdom of a group of smart people articulated a vision and an associated roadmap.”

Who were they?

“The best. From every field such as industry and business, development, economic growth, urban planning, resource management, science, technology, governance, finance, etc, they got the best from around India and the world. They got the most successful entrepreneurs and business tycoons to add to the group of experts. They got the most respected academics. The challenge to this group was simple: what is the best way for a large economy to transform itself given the resources available? The expert committee took their time and in one year came up with a recommendation.”

How much did it cost, this bunch of experts? And why experts? Don’t we know that amateurs do make amazing contributions?

“That was the problem. India was stumbling around because every amateur and his brother was coming up with vision which with 2020 hindsight we can say was … how shall I put it … amateurish. It had become a cottage industry of sorts. Sit around, write a book, and there was the so-called vision. That changed when a few industry leaders said enough is enough. They got together and put in I think some paltry sum, I guess around $10 million to convene this panel of experts. And then they aggressively sold the goal to the country. Of course, they did not do it for altruistic reasons. They all became fabulously wealthy from the accompanying growth. But that is another story.”

Surely, $10 million is not paltry?

“Actually it is. If you consider that the spending was crucial in generating more than $10 trillion of wealth which would not have otherwise happened, that is what makes it paltry. Do the arithmetic.”

And the recommendation was?

“Like I said, cities. Transform India by building new cities designed and built using the best planning. Just by credibly committing to build these, it engaged every resource available. Recall that India was a very “young” country demographically. The people came from there. The capital came from everywhere. Businesses around the world realized that here was a market that the world had never seen. There was a mad rush to invest in India. On average, US$1 billion a day was the foreign direct investment for the last 10 years. India mopped up a significant part of the investment that used to flow into the US and China. So it was not just internal resources but global resources that flowed into India.”

But why didn’t that happen before?

“India was there at the right time. The demographics were right. But until the credible commitment to actual economic growth was made, there was no reason for investors to invest in India. So when that commitment was made, it galvanized everyone. See, the thing is that wealth is created by human action. But human action is goal directed. Setting a good goal requires deep thinking, not political amateurism. If the person doing the thinking for the country is an illiterate scamster, you are in trouble.

“But if skilled people put their minds together and set the agenda, then the goal is interesting enough, difficult enough, rewarding enough to channel all sorts of resources to its fulfillment. It creates it own dynamic, like a forest fire. The more it grows, the more resources it sucks out from the surrounding and grows even more. The wind feeds a forest fire while the same wind would snuff out a candle. To make use of the winds of change, we needed a forest fire, not a candle which we were protecting from the wind this far.”

So how does one start a forest fire?

[This has been parts eight and nine of a ten-part series. The previous part was Pune DeCi.]

25 Comments »

  1. The fire has already been started decades back and has engulfed the world by now. The name of the fire is global capitalism, fed by the sustained wind of human greed, chanting the mantra of economic growth. To meet the criteria of your fire, it does suck resources from the earth — forests, ecosystems, metals, birds, animals, oceans, oil, coal, human energies — the whole natural capital, and coverts this natural capital into “products” cellphones, cars, ipods, jets, what have you. Boy this fire is quite wild. It doesn’t care about the collapse of life supporting systems themselves.. scientists crying from the rooftops about sixth extinction, climate change, corals bleeching, forests dying..

    As morpheus says in Matrix , “Welcome to the Machine”. The machine is what you refer to as fire. Don’t worry. If there’s money in it, the machine will immediately jump on the DeCi idea. Especially, with the amount of liquidity in the system these days.

    ( Offtopic: To me the question is not of starting the fire, but how to control the fire, and ensure the survival of earth as we know it, and still provide for people a decent living. Is it possible? )

    Comment by Madhav — May 19, 2007 @ 2:54 pm

  2. Alas for Madhav, only five officially communist states left in the world. :) And three of those are China, Laos and Vietnam, all of which owe their recent growth mainly to free-market reforms. The other two are North Korea (a Stalinist totalitarian nightmare if ever there was one) and Cuba (where the regime will collapse as soon as Castro dies). Hey Madhav, old chap, here’s to a Red-free world in 2010, and the apotheosis of global capitalism. :) Cheers.

    Comment by Brown Sahib — May 19, 2007 @ 6:54 pm

  3. You are either with us or against us
    – George W. Bush

    There is no grey area. There is no middle ground. There is no pro and con. Simple. World is black or white. Right brown sahib ? Either its communism or capitalism.

    By the way, i challenge you to get the DeCi idea going with the help of free market capital. I challenge you do an IPO of a company DeCi inc, raise $10 billion and say that the returns are going to be after 5 years, after all the villagers are settled in, educated and become productive. You know how much you are going to raise through the market ? $0.
    You know what free market capital goes to ? Immediate returns. Quarter -on – quarter numbers. Long term is atmost 1-2 years. Take Reliance. Huge capital. Huge clout. What do they do ? They start “retail revolution”. What does that mean ? Selling Bitter Gourd for Rs3 less per kg and cabbage for Rs4 less, than mom-and-pop store. That’s free market capital my friend. For you it may be “Development”. For me, there are better uses of capital. Why is Reliance not visionary ? DId you know that India spends $55 Billion on importing energy ? Why didn’t Reliance, instead of using the capital on retail, lock-in the capital for 5 years and say, “we are going to hire Indias best and brightest, do research, and get into Alternative energy business”.
    It din’t because there is risk and it’s long term.

    Who inveneted the internet ? (besides Al Gore :) ). It’s not your free market silicon valley. It originated with DARPA with tax payer money. After the incubation period and all the risk taking by public, free market jumped in to make money. That’s all. The incubation and risk is taken by tax payers.

    All iam saying is free market won’t do DeCi. It’s too long term, and returns are not guaranteed.

    I was also questioning (through these 10 part series), the very idea that development means energy intensive big cities, with lots of consumers. That has a massive impact on environment. Your free market capitalism has been a disaster on the environmental front. If you don’t agree, iam not going to convince you. You need to educate yourself.

    Iam neither a communist nor a capitalist. Both have flaws. Iam for prudent policies based on ground realities. When worlds top scientists tell climate change is real threat, and see that free markets best response is lousy carbon trading, I see there is a problem. Iam not locked into any ideology. I once read a nice quote — “Communism collapsed because it failed to recognize the economic realities. Capitalism may collapse but it failed to recognize the ecological realities”. chew on that.

    By the way,
    >Hey Madhav, old chap
    Huh. Another black and white. Anyone pointing flaws in capitalism must “old” and sitaram yechuryish ?

    Comment by Madhav — May 19, 2007 @ 7:50 pm

  4. “Communism collapsed because it failed to recognize the economic realities. Capitalism may collapse but it failed to recognize the ecological realities”.

    read “but it” as “because it”

    Comment by Madhav — May 19, 2007 @ 8:00 pm

  5. [...] Read more at Atanu Dey [...]

    Pingback by » The Future Past - Street talk and opinions — May 19, 2007 @ 9:05 pm

  6. free market?
    can i ask Gangadin which merkets are free?

    Comment by andiron — May 19, 2007 @ 9:11 pm

  7. So a man on the street said all this?

    Comment by Corporate Serf — May 20, 2007 @ 6:08 am

  8. More seriously dude; write articles to get the land ceiling act and other such throwbacks repealed. Private sector would do the rest if this idea is feasible. Yes there will be initial mis-allocations; but I trust Coase.

    Comment by Corporate Serf — May 20, 2007 @ 6:12 am

  9. If we dont fix the problems with our existing cities, any new private cities will eventually develop the same problems.
    The number one problem our cities have is that there is no real accountability at the leadership. Who runs our cities? Last year, Bombay elected a woman mayor. Have any of you heard from her about her plan and vision for future of that city?
    I haven’t lived in any large city in India, but I know they are mostly run by some IAS officer. Using regulations like FSI and land ceiling acts, these beurocrats restrict new housing supply and thus protect property values of existing real-estate owners. And they blame it on infrastructure constraints, which doesn’t make sense to be because half the population of our cities already dont have/need any infractruture to live.

    Comment by muttan — May 20, 2007 @ 7:25 am

  10. Ah lovely, a good old-fashioned punch-up. :) Apologies, Atanu — I know this sort of thing isn\’t really even remotely what this blog is for, but when someone calls global capitalism a \”fire fed by the sustained wind of human greed\” which sucks \”forests, ecosystems, metals, birds, animals, oceans, oil, coal, human energies — the whole natural capital, and coverts this natural capital into \’products\’,\” taking pot-shots at the chap and at that sort of rhetoric is frankly irresistible. :) And madhav, that sort of rhetoric doesn\’t really suggest a centrist with a belief in the gray, you know. :) But this sort of trading of accusations is quite pointless; I\’d rather address your substantive points, insfar as you tried to make some.

    1. Of course private corporations think long-term, and invest for the long term. Are you familiar with the history of Standard Oil or ALCOA? These companies were in fact so successful at thinking long-term, creating capacity in anticipation of future needs, entering into long-term agreements with suppliers and carriers, creating new technologies, etc, that antitrust action was initiated to prevent them from becoming all-powerful monopolies. :) GE and IBM haven\’t exactly been known for lacking long-term strategic planning, either — they routinely tend to think about what lies down the road 10, 20, 30 years from now. What do you think Tata Motors has been doing with their Rs. 1 lakh car, or Arcelor Mittal with their attempt to develop West African iron ore reserves over the next ten years, so as to secure low-cost iron ore inputs for their global operations for the next half century? The idea that corporations don\’t plan is a myth. Of course they do. The difference is that their planning, unlike governmental planning, is subject to market discipline, that is, the willingness of the capital markets to finance their plans by buying their securities. Incidentally, I don\’t know if you\’re aware, but Tata Motors recently made a significant investment in the tiny French company, MDI, to help develop zero-pollution car engines that can run on compressed air. They did it not only out of environmental concern, but also because such a car would be cheaper for Third-World consumers to run, since it would require neither fossil fuels nor electricity. This is an investment that probably won\’t bear real fruit commercially for another 5-10 years; nevertheless, they have made it, and companies in fact do this sort of thing all the time. Private corporations are also perfectly amenable to taking risks — think of the billions invested in drug discovery by pharma companies, with no guarantee of a marketable product, and, even when marketable products are developed, the development, testing and approval cycle takes around a decade or more. Or think of the film industry, or book publishing. Clearly, your statement is absurd. Most large, publicly listed corporations actually use sophisticated strategies to quantify and hedge against various kinds of risk, but they don\’t avoid risk by any means.

    2. So far as your challenge goes, Madhav, like I said elsewhere on this blog, this sort of thing is already beginning to happen. I quote (from the Hindu):

    \”On Republic Day this year, Macquarie Bank, Australia’s largest securities firm, announced that it will invest $25 billion along with three partners to create an ultramodern integrated township on 65,000 acres in Andhra Pradesh, just 170km off Bangalore. Four weeks later, Tishman Speyer Properties LP, which owns New York’s famous Rockefeller Centre and Frankfurt’s MesseTurm, said it, along with ICICI Bank and Nagarjuna Construction Co, will build a $2 billion residential and commercial township for 30,000 people, spread over 400 acres near Hyderabad. On Monday, or exactly another four weeks after the Tishman announcement, Al Nakheel LLC, an international property development firm owned by the Dubai government said it will, along with DLF Ltd, build two ‘Manhattans’ near Mumbai and Gurgaon, spread over 20,000 acres each. Each city will cost about $10 billion or Rs43,300 crore to construct, with the first phase, expected to be completed by 2010, seeing the partners investing $5 billion apiece. In all, $47 billion or Rs203,000 crore of private money will be invested over the next couple of years to create four ultra modern cities from ground up. The cities near Mumbai and Gurgaon will be three times as large as New York’s Manhattan Island, DLF said. All the four cities will be world-class and self-contained, with wide, international-quality roads, telecom networks, educational institutions, industrial clusters, hospitals and amusement parks.\”

    Mind you, I\’d be the first to admit that a lot more is needed — after all, that\’s only four new cities in a country of over one billion people. But let\’s be honest here — we haven\’t exactly been very welcoming of this sort of private investment until fairly recently (our track record from the \’50s through the \’80s, was, again, to be honest, one of expropriation and excessive regulation that would deter most sensible private investors, especially foreign ones), and so investments on this scale are just beginning now. I can pretty much guarantee that if these projects are allowed to proceed with minimal interference (THIS is what I personally am skeptical about; not the private sector\’s willingness but the likelihood of officialdom — and troublemaking busybodies of the pink/red variety — staying out of the way), there will be many more to follow. What was it you said about raising $0? By last count, the 4 cities mentioned above involve a total investment of $47 billion. And, like I said, this is just a small beginning; there are bound to be hiccups and setbacks before this sort of thing really gathers momentum.

    3. Global warming and the environment. I happen to care a great deal about environmental issues. However, environmental degradation is what economists (this is, after all, a blog about the economy, yes?) call an \”externality,\” or \”third-party effect,\” and even free-market economists readily agree that this is an area in which government regulation is to be welcomed. Having said that, I do believe that many environmental problems can be solved even without government action, through the interaction between the market and civil society. The recent \”greening\” of Apple as a result of shareholder activism and negative publicity from Greenpeace is a good example.

    P.S. Actually, old chap, \”old chap\” is just a form of address — it isn\’t meant to be interpreted as a guess at your age. Queen\’s English and all that, eh what? ;) ;) After all, I don\’t call myself Brown Sahib — or Gunga Din, as I believe andiron put it — for nothing. :) Incidentally, andiron, as far as your rhetorical question goes, of course no markets are totally unregulated. But some are certainly a heck of a lot freer than others. :) That\’s why a bunch of smarty-pants invented the Index of Economic Freedom, eh what? And I should know, having left one of the less free ones for one of the freer ones, and no regrets, might I add. :)

    Comment by Brown Sahib — May 20, 2007 @ 10:10 am

  11. Btw, I wouldn’t cast aspersions at Reliance, Bharti and the rest vis-a-vis retail. The “retail revolution” they have in mind isn’t really about the storefront, it’s about the supply chain. Big-box chains, as they are called in the U.S., despite their many negative features, have a scalability that mon-n-pop stores do not have, which means that they can exert control over suppliers and carriers in ways in which mom-n-pop stores can not. Power thus shifts from the supplier and the distributor to the retailer. This revolutionises the logistics of supply; in India’s case, it will ultimately lead to better rural warehousing and transport infrastructure (Reliance and Bharti are already making big investments in the supply chain to lower transport costs and reduce the loss of produce in transit, which is at unacceptably high levels in India); higher agricultural incomes because of higher yields, volume pricing and the elimination of middlemen; closer correlation between supply and demand; and, in the very long term (25-30 years), the consolidation of agriculture, releasing surplus rural labor for other sectors of the economy (the exact opposite of the economically unviable smallholdings encouraged by post-1947 government policies, which are simply not sustainable in the long term). Mukesh Ambani happens to be more interested in changing the dynamics of agriculture than in alternative energy; that’s his prerogative, and it’s no less visionary. Companies like Suzlon, REVA, Tata Solar and Tata Motors are already working in the alternative energy field.

    Comment by Brown Sahib — May 20, 2007 @ 10:49 am

  12. If we are trusting the govt to do something, then i believe nothing’s gonna happen. We have Mayors for cities, but more than being a ceremonial post, its of no use. They have no rights or resources at disposal to make a change (even if they are wanting to).

    That’s why its left to the private sector to come up with islands of excellence within India and hope that it will spread into the hinterland. This article throws some light on it

    http://www.dnaindia.com/report.asp?newsid=1087323

    What India needs today is a hell lot of developmental activity. Environment will be affected for sure. But i believe it can wait. Let the developed countries who are the biggest polluters take some affirmative action. We can follow them later.

    Comment by Full2Njoy — May 20, 2007 @ 11:06 am

  13. The Government’s only business is to govern…not to send out moon missions using money it has looted from its citizens.

    Comment by Shoghi Effendi — May 21, 2007 @ 9:34 am

  14. If the year 2020, is like you visioned, then well and good, otherwise,……

    Comment by Alex — May 21, 2007 @ 12:21 pm

  15. It’s easier to write such imaginative posts from the comfort zone of developed world. Even visits to India don’t seem to dent one’s optimism. However, once you start living in India, you realize that ground reality is not that rosy…

    Comment by Ashutosh — May 21, 2007 @ 7:39 pm

  16. Umm, nationwide median incomes of 2000$ in 2020 might be a tad optimistic. Especially considering rates of population growth, and low levels of literacy and education.

    High median incomes among the college-educated urban middle classes, on the other hand, is a story I’d buy. Median per capita incomes for the college-educated certainly should approach First World levels by PPP by 2020. (Although for this group I wouldn’t take a PPP ratio of 6:1, as is currently done; by 2020 it will probably be 2:1, as many of the commodities, services and manufactured products they consume will increasingly be subject to global pricing.) This means a median per capita income of about $30,000 for this group by 2020, up from about $6,000-$12,000 now.

    People with MBAs and comparable professional qualifications currently start at about $15,000 a year in India, while those with MBAs from top schools start at about $36,000 a year, compared with about 150,000$ a year for top B-school grads in the U.S.; by 2020, Indian MBAs from top schools should start at around $110,000 a year, and their U.S. counterparts will be starting at around $220,000 a year by then. CEOs’ and top executives’ compensation will also be at about half U.S. levels, in nominal dollar terms.

    For these people, India will already be a First World country — with some convenient lifestyle advantages because of cheap unskilled labor. For those without even primary education, on the other hand, I think it will be a very different story. Oh well, que sera, sera.

    Comment by Brown Sahib — May 21, 2007 @ 10:03 pm

  17. Why don’t they build these big cities somewhere farther to the existing cities, which may lead to balancing development all over India? Or why don’t they invest in other areas like transportation and other sectors or even in agricultural development. They want to make India as realestate hub. They want to cash India’s booming economy man. Nothing else. These few metros becoming greater metros and great greater metros. Rest of the India is as usual. These hells are becoming more and more slums w/o good infrastructure and basic amenities, traffic jams, no water, pollution, no good transportation, crime etc.

    Comment by anc — May 22, 2007 @ 1:38 am

  18. Reinstate and make inviolable -

    Right to hold Property

    Repeal -

    - The Urban Land Ceiling & Regulation Act
    - The Rent Control Act
    - The Foreign Exchange Management Act
    - The Monopolies & Restrictive Trade Practices Act
    - The Industrial Disputes Act
    - The Employment Contract Regulation Act
    - The Wealth Tax Act
    - The Minimum Wages Act
    - The Employees State Insurance Act
    - The Employees Provident Fund Act

    Abolish -

    - The Planning Commission
    - Ministry of Human Resources Development
    - Ministry of Coal
    - Ministry of Agriculture
    - Ministry of Agro & Rural Industries
    - Ministry of Chemicals & Fertilizers
    - Ministry of Civil Aviation
    - Ministry of Culture
    - Ministry of Food Processing Industries
    - Ministry of Panchayati Raj
    - Ministry of Minority Affairs
    - Ministry of Power
    - Ministry of Small Scale Industries
    - Ministry of Steel
    - Ministry of Textiles
    - Ministry of Tourism
    - Ministry of Tribal Affairs
    - Ministry of Women & Child Development
    - Ministry of Youth Affairs & Sports
    - Ministry of Science & Technology
    - Ministry of Rural Development
    - Ministry of Petroleum & Natural Gas
    - Ministry of New & Renewable Energy
    - Ministry of Labour & Employment
    - Ministry of Development of North Eastern Region
    - Ministry of Consumer Affairs, Food and Public Distribution
    - Ministry of Overseas Indian Affairs
    - Ministry of Social Justice and Empowerment
    - Department of Atomic Energy
    - Department of Space
    - National Commission for Women
    - National Commission on Population
    - Office of the Principal Scientific Adviser – Planning Commission
    - University Grants Commission
    - Minorities Commission
    - Sahitya Akademi
    - Sangeet Kala Akademi

    Comment by Baburao Ganpatrao Apte — May 22, 2007 @ 12:36 pm

  19. Awww.. If India were all cities, where would I head for a countryside holiday ??? :)

    Brown Sahib :

    Amused by :

    “Environment will be affected for sure. But i believe it can wait. Let the developed countries who are the biggest polluters take some affirmative action. We can follow them later.” – A faint hint of the ever alive adoloscent ? :)

    ” I do believe that many environmental problems can be solved even without government action, through the interaction between the market and civil society.” – Yeah, right… Why not, if it can rain in deserts…

    Impressed by :

    “For these people, India will already be a First World country — with some convenient lifestyle advantages because of cheap unskilled labor. For those without even primary education, on the other hand, I think it will be a very different story. ” – Touche !

    Now, Now… Am I someone seeing red everywhere? Tell me about it, honorouble soothsayers of the “civil intelligent society” ?

    Comment by A Simpleton — May 23, 2007 @ 1:08 pm

  20. Actually, A Simpleton, that first quote isn’t from me, but from Full2Njoy — I don’t think we should lag behind the developed world on the environment at all. In fact, the carbon trading under Kyoto is benefitting both us and the Chinese in this regard, as clean plants here are basically receiving financial transfers from polluters in the West in return for carbon credits, providing us with an extra incentive to clean up.

    As for the second quote, I provided the example of what’s recently been going on with Apple and Greenpeace, and I think there are many other examples of corporations and civil society groups actually working out environmental solutions well in advance of any government regulatory inititives (HP, Shell, GE) — especially in the U.S., where the present administration is not very interested in environmental regulation. So that’s a statement based on the historical record of the last few years.

    The third quote I stand by totally. It is a factual statement of what the future will bring. I didn’t say that I think it’s good (or bad, for that matter), merely that that is what will happen. For what it’s worth, I am not overly concerned about equality as an end in itself (I take inequality, stratification, etc for granted as an inevitable feature of complex modern societies based on the division of labor, although I think institutional mechanisms for mobility, as opposed to redistributive provisions aimed at greater equality, are very important), and I do believe that having 7-8% of the population reach a Western standard of living (as will happen) is better than having only 1% reach that standard, as was the case in the past. That doesn’t mean I wouldn’t prefer it if everyone in India earned over $40000 a year, I just don’t see any logical reason why that should be expected when much of the population can’t even read and write, and has no useful skills.

    Comment by Brown Sahib — May 23, 2007 @ 9:54 pm

  21. Hi Brown Sahib,
    Just a factual point. Indian economy has just crossed $1 trillion, which means that the per capita nominal GDP is about $1000 not $500,other than that fantastic article

    Comment by AS — May 24, 2007 @ 8:31 am

  22. A problem with using only USD exchange rate for GDP. When the dollar weakens, India’s economy magically goes up.

    Comment by j yin — May 25, 2007 @ 11:31 pm

  23. [...] [This concludes the ten-part series on the topic of building new cities in India. The previous part was The Future Past. ] [...]

    Pingback by The Indian Economy Blog » Make No Little Plans — May 26, 2007 @ 12:43 pm

  24. FYI… as of now Indian per-capita income has already crossed $1000 in exchange-terms and over $3000 in PPP. And given that it is growing at 8% in rupee terms and over 10% in dollar terms, it wouldn’t be too surprizing to see a 2020 figure more at around $10000 in PPP that is a pretty good figure. And if we are able to manage our familial and social structures impact, this amount could give sufficient room to keep ourselves happy, economically and socially. But, to get there we need to first abolish illiteracy and second, get the development to rural areas. If these two are done, the markets will take care of the rest.

    Comment by Balaji Viswanathan — June 2, 2007 @ 4:57 am

  25. I think that India has better presumption that China to be World Economic Leader. But not now, because China’s gdp growth is faster than India’s gdp growth:

    Gdp growth China:
    http://www.euroekonom.com/database/graphs.php?type=gdp-growth-china&lang=an&time=0

    Gdp growth India:
    http://www.euroekonom.com/database/graphs.php?type=gdp-growth-india&lang=an&time=0

    India will be World Leader. Maybe 2040, maybe 2050, maybe later… India has today overmuch things so amateur. For example websites of Ministry of Statistics and
    Programme Implementation are HORRIBLE HORROR – non-professional.

    Comment by Narah — June 12, 2007 @ 2:56 am

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