The Indian Economy Blog

The 21st century will be India’s. But some people just won’t get it.

What is common between these films?
Garam Hawa (1940); Naya Daur (1957); Upkaar (1967); Namak Haram (1973); Jane Bhi Do Yaaron (1983); Damini (1993); Gupt (1997); Phir Bhi Dil Hai Hindustani (2000); Rang de Basanti (2006)
As you might have guessed, each of these films portray the socio-economic realities of India in their times or have a [...]

The media “controversy” over offshore outsourcing subsides
Angry rants and dismal laments about offshore outsourcing are joining over-excited Internet revolution articles from 1999 in the dust-bin.
As we’d predicted.
Greg Mankiw , who’s experienced the outsourcing sturm und drang first-hand, points us to this David Leonhardt article in the New York Times:
A few years ago, stories [...]

Two news incidents caught my eye that had a similar vein of job market conditions running through them. One, read about young American workers conducting part of their work-life in Bangalore in Americans seek opportunity in booming Bangalore. Two, labor shortage in China enables an increase in working conditions and benefits as portrayed in Labor [...]

Raghuram Rajan and Arvind Subramanian of the IMF have written an excellent op-ed in the Financial Times in which they diagnose a new problem, one they call the Bangalore Bug, and one whose symptoms have been addressed several times on this blog. I’ve reproduced the piece almost in full since I figured most of you [...]

Ajay Shah analyses the government wages and compares them with the prevalent market rates in Revising the wages of civil servants. The bottomline is captured below.

The main story is simultaneously that while GOI employees at the top are incredibly underpaid - by market standards - the bulk of GOI employees (roughly 98% of them) [...]

I am not a great fan of Nasscom reports, but this one made me sit up. The technology sector (give or take a few) accounts for 36 billion dollars in revenue and just about 1.3 million jobs. So how much is it in real terms? A big part of the economy of a miniscule part?

It is time to correct India’s lopsided education budget
Salaries in India, especially for skilled workers, are rising. This is almost invariably attributed to the projected shortage in the number of workers available to sustain the rapid growth in India’s IT, biotech and other services. Those alarmed by rising wages contend that this will make India [...]

The employees of the Airport Authority of India, who’ve been in the news recently courtesy the anti-privatization protest strike have started their own blog.
This (the blog, not the strike) is good news. Thanks to technology, more and more people have avenues to express their point of view.
As far as [...]

If one were to look at the factors of production (land, labour, capital and enterprise) and look at the corresponding cases pending in Indian courts, one can have a very good understanding of the performance of the institutions arranged around these factors. It is no wonder that any task of economic reforms will have to [...]

The US-based Conference Board has a new report out on global productivity (hat tip to New Economist). The core message of the report is the following:
“Most countries in the developed world (North America, Europe and developed Asia) experienced a slowdown in productivity growth rates in 2005…Countries at the higher end of the global productivity spectrum [...]

Anyone who has tried to provide a plan to a minister for implementing reform (market-based ones) in the public sector will soon run into the thorny issue of labour unions. It is a tough nut to crack! Ironically, West Bengal seems to have have found a way, and that too by making somebody else pay [...]

The answer: an inadequate and outdated educational system.
Ajay Shah writes
One of the key reasons why India is doing well today is the revolution in services exports, where white collar staff in India are plugged into globalisation, thanks to improvements in telecom. Today, there are probably a million people working in export-oriented IT [...]

Over the last few years, there’ve been an increasing slew of proclamations about America’s “decline” as an economic power — for instance, check this Fortune cover story by Geoff Colvin.
A key figure cited by the “declinistas” as evidence of America’s decline is the huge imbalance of engineering graduates between the US and those two [...]

Speaking about FDI in retail, the Indian Express writes:
Plenty has been said—and an awful lot written—about mom and pop shops shutting down and taking with them the friendly, smiling, simple shop assistants who apparently define a part of our culture. That’s what, with different details, America’s “liberal” and anti-free trade conservatives say about outsourcing to [...]

The Hindustan Times reports:
India contributes 28 per cent to the total talent pool of knowledge workers in the world. This has helped it corner 65 per cent of the information technology business and 46 per cent of the ITES market. But the greatest challenge staring the software services exports in the face is skill shortage. [...]

In the previous post, Eswaran points me to this article which claims that labour laws are the least of India’s worries. The reasoning given there is so bad that I was left wondering how anyone in his right senses could advance it. Just as I was preparing to write a response, I remembered that [...]

Sanjeev Naik points me to a piece by Amelia Gentleman in the International Herald Tribune that speaks about the plans of the West Bengal government to ban hand-pulled rickshaws. Gentleman writes:
The mayor describes the job as “despicable”; the chief minister of the state of West Bengal, a Marxist, says it is “barbaric.” City officials point [...]

First it was the Wall Street Journal. Then it was Yale Global , followed by the Economist.
And now, it’s Fortune’s turn to tell us that India isn’t an economic juggernaut — and isn’t likely to become one, in the near future.
Clay Chandler laments India’s
almost willful disregard for the fundamentals of developmental [...]

Today’s lead editorial in the Times of India is spot on regarding the “labour movement” in India.
India’s unionised labour is a tiny, entrenched labour aristocracy which when not forcing lock-outs and shutdowns, hikes pay and perks for their own members and makes it extremely tough for poorer, lower-wage workers to enter the job market.
This raises [...]