A presentation by Mohan Guruswamy on the economic prospects of India and China
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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 06/21/22 Mohan Guruswamy 1 Meet India!
Transcript
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. 04/27/23Mohan Guruswamy 1
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.
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. 04/27/2330Mohan Guruswamy
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.
Transportation Industry 1417.13 11.70Manufacturing 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.
Share of FDI in China in Various Sectors.
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Sector Share %Agriculture and Mining 2.73Manufacturing 70.95Real Estate and Construction 11.08Lease & Business Service 4.66Production & Supply of Power, Gas & Water
1.87
Transport, Warehousing, Posts & Telecommunication
2.10
Information and Technology 1.51Miscellaneous Services Sector 5.10Source: Foreign Investment Department, Ministry
of Commerce, People’s Republic of China.
India’s Investment closing in on China’s (% of GDP).
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Centralization in India: Administrative Expenditure.
