Idéfix wrote:

goodcitizn wrote:I like the idea of believing that India will do much better than China over the long haul. But a few things need to be considered.
 
1. In about 10 years, India's population will equal China's and surpass it if the current fertility rate of 2.7 births per woman contiues versus 1.6 births per woman in China.
 
2. India's literacy rate is inferior to China's and below that of world average.
 
The table below (from Wiki) shows the adult and youth literacy rates for India and some neighbouring countries in 2002. Adult literacy rate is based on the 15+ years age group, while Youth literacy rate is for the 15–24 years age group (i.e. youth is a subset of adults).
 
[th]Country[/th][th]Adult Literacy Rate[/th][th]Youth Literacy Rate[/th]

China	95.9% (2009)	99.4% (2009)
Sri Lanka	90.8 (2007)	98.0
Burma	89.9% (2007)	94.4% (2004)
Iran	82.4% (2007)	95% (2002)
World Average	84% (1998)	88% (2001)
India	74.04% (2011)	82% (2001)
Nepal	56.5% (2007)	62.7%
Pakistan	62.2% (2007)	73.9% (2010)
Bangladesh	53.5% (2007)	74%

3. One doesn't need statistics to show how bad the public healthcare system is in India.
 
4. Information technology only represents about two and a half million people representing less than 0.5% of the total working age population. In contrast, over half the working age population is in agriculture representing a sixth of output. Increased use of science and automation in this labor-intensive sector would significantly increase productivity and output thereby increasing the income level of this rural population.
 
5. High levels of corruption, red tape, dearth in infrastructure, environmental degradation etc have a bearing on future growth as well.
 
Thanks for the informative graphs. The numbers have certainly been encouraging over the last decade. Regardless of which government comes into power and who ends up being the PM, India has a serious task ahead.

I agree with you on the challenges facing India. An under-nourished, uneducated population cannot easily find its way to prosperity. Every single economic miracle in the last century -- Japan, post-war Germany, South Korea, Hong Kong, Singapore, southeast Asia, and now China -- is based on a population with solid primary and secondary-level education. India has done better at higher education for its privileged few than primary and secondary education for its masses. And once someone reaches adulthood, it costs many times as much money to teach them the three Rs than to do so when the person is young. I think these are some of the fundamental reasons India will find it hard to emulate China's long-period growth rate of 10% a year, with some years exceeding 12%. I think if India catches up to China in the next 10-15 years, it won't be because we grow any faster, but it will be because China slows down. 

The fundamental reason I believe China will slow down is its population pyramid. Here is some interesting news from a news report earlier this year: 

ON JANUARY 18th the National Bureau of Statistics (NBS) announced that the number of working-age Chinese shrank last year by a total of 3.45m. In the slow-moving world of demography, that is a big turning point. The mobilisation of Chinese labour over the past 35 years has shaken the world. Never before has the global economy benefited from such an addition of extra human exertion. Now the additions are over...

When the labor pool begins to shrink, the economy can't keep up its blazing hot pace of growth. Of course, the article explains how the peak may not have been reached just yet, but we are pretty close. Just when growth tapers off, you are saddled with another problem: an increasing dependency ratio (ratio of the number of people too young or too old to work to the number of working-age adults). As dependency ratio increases, more of the nation's economic output needs to be spent on taking care of the old, so less can go into investment to spur further growth. This is an estimate of the future ratios for India and China from The Economist:


As you can see, demographics are in India's favor for a few more decades, while that tide has already turned against China. Of course, all those young people are a blessing only if you can suitably educate and employ them; otherwise, you end up with social unrest and violence, not a growing economy.

rawemotions wrote:Even on  inflation which you say have accounted, I remember reading a news report where Chidu changed the base year of inflation sometime in 2006. Do not know whether it was really done.

rawemotions wrote:sustainability of growth is suspect.   Here UPA comes out very badly.

rawemotions wrote:So I do not see the purpose behind this excersize. You paint a great picture.

rawemotions wrote:Whereas GoldmanSachs seems to agree with what people are really feeling.

rawemotions wrote:FYI China is seriously considering amending its one child policy.

Idéfix wrote:

rawemotions wrote:Even on  inflation which you say have accounted, I remember reading a news report where Chidu changed the base year of inflation sometime in 2006. Do not know whether it was really done.

This right here is your problem. You seem to have a rather half-baked understanding of the issues at hand, and some very strongly formed conclusions. So you take any facts that come your way to snugly fit those conclusions. Adjusting the base year of inflation is a very common step that is taken every few years. It makes no difference to how real GDP is calculated. I have explained the math involved in an earlier post to Smartha, with some sample numbers. The last time the base year was reset by RBI was in 2004. Before that, it was reset in 1999, and before that, in 1993. So if you are comparing numbers from 1991 through 2012, like I did, you need to correctly apply deflators so that the numbers for all years are in the same base.

rawemotions wrote:sustainability of growth is suspect.   Here UPA comes out very badly.

That's your opinion, and it is not backed up by any data. You are welcome to cite data to back up your opinion, if you so wish.

rawemotions wrote:So I do not see the purpose behind this excersize. You paint a great picture.

Hardly. I paint the picture as it is; it is not a great picture. Growth has slowed from the highs of UPA-1, and we still have a gap to close with China, and I am speaking before looking at the numbers here, but I suspect income inequality has been getting worse. So the picture is not great, but it is not as bad as I believed it was before I started looking at the numbers.

rawemotions wrote:Whereas GoldmanSachs seems to agree with what people are really feeling.

I am sorry, but I don't set much store by what these investment banks say. They have no scruples about running countries into the ground if that helps them to a few more bucks. I am capable of the basic yneey ed to understand how UPA compares to NDA; I don't need GS to tell me thate 

rawemotions wrote: It is laughable to hear my knowledge as half-baked from someone who does an INCOMPLETE job of doing an analysis of the economy IGNORING key parameters like Debt, Trade Balance, Job Growth etc.. And the worst part is instead of gracefully accepting this and fixing your analysis, you are going on building castles in air, making statements about sustainability of growth. Comparison based on just a few parameters is WORSE than not comparing, since it paints an erroneous picture of the real state of the economy.

rawemotions wrote:Any economist worth his salt will tell you that Job Growth, Debt are also important parameters for analyzing the economic management of a country. So I am making a direct point that your analysis is incomplete without this data. I am not here to find this data. 
I am saying that your analysis needs to include these for a holistic picture. Come on! Please rebut my arguments if you can, rather than pussyfooting around.

rawemotions wrote:Any economist worth his salt will tell you that Job Growth, Debt are also important parameters for analyzing the economic management of a country. So I am making a direct point that your analysis is incomplete without this data. I am not here to find this data. 
I am saying that your analysis needs to include these for a holistic picture. Come on! Please rebut my arguments if you can, rather than pussyfooting around.

goodcitizn wrote:

rawemotions wrote:Any economist worth his salt will tell you that Job Growth, Debt are also important parameters for analyzing the economic management of a country. So I am making a direct point that your analysis is incomplete without this data. I am not here to find this data. 
I am saying that your analysis needs to include these for a holistic picture. Come on! Please rebut my arguments if you can, rather than pussyfooting around.

Would it be helpful if the following is done, individually, to satisfy you?

1. Chart on fiscal deficit and account deficit.

9. Chart on rupee value aganist the dollar.

Anything else? Assuming all this is done, how will you use it?

goodcitizn wrote:

rawemotions wrote:Any economist worth his salt will tell you that Job Growth, Debt are also important parameters for analyzing the economic management of a country. So I am making a direct point that your analysis is incomplete without this data. I am not here to find this data. 
I am saying that your analysis needs to include these for a holistic picture. Come on! Please rebut my arguments if you can, rather than pussyfooting around.

Would it be helpful if the following is done, individually, to satisfy you?

1. Chart on fiscal deficit and account deficit.
2. Chart on unemployment rate.
3. Chart on tax revenue.
4. Chart on education and healthcare as a % of GDP.
5. Chart on Foreign Direct Investment.
6. Chart on exports and imports.
7. Chart of quantifying infrastructure deficit in some way.
8. Chart on interest rates.
9. Chart on rupee value aganist the dollar.

Anything else? Assuming all this is done, how will you use it?

Idéfix wrote:Right, and all of this will hopefully be complex and mind-numbing enough that we can all forget what the headline numbers tell us.

Interestingly, you even list HDI numbers; those have already been analyzed. This tells me you have done a good job of not reading the analyses that have already been done, so your preconceived notions are not threatened too much. It is also fascinating that you called the analyses half-baked without recognizing all the pieces that were included!

Marathadi-Saamiyaar wrote:

goodcitizn wrote:

rawemotions wrote:Any economist worth his salt will tell you that Job Growth, Debt are also important parameters for analyzing the economic management of a country. So I am making a direct point that your analysis is incomplete without this data. I am not here to find this data. 
I am saying that your analysis needs to include these for a holistic picture. Come on! Please rebut my arguments if you can, rather than pussyfooting around.

Would it be helpful if the following is done, individually, to satisfy you?

1. Chart on fiscal deficit and account deficit.

9. Chart on rupee value aganist the dollar.

Anything else? Assuming all this is done, how will you use it?

1. is VERY important and that in itself will indicate the govt spending, direction of economy, social programs, tax revenues. 9 is directly related to 1 along with imports, GDP, productivity, exports, and oil bill, etc..

Both these will tell a lot of things about the economy and an insight into the future.

goodcitizn wrote:

Marathadi-Saamiyaar wrote:

goodcitizn wrote:

rawemotions wrote:Any economist worth his salt will tell you that Job Growth, Debt are also important parameters for analyzing the economic management of a country. So I am making a direct point that your analysis is incomplete without this data. I am not here to find this data. 
I am saying that your analysis needs to include these for a holistic picture. Come on! Please rebut my arguments if you can, rather than pussyfooting around.

Would it be helpful if the following is done, individually, to satisfy you?

1. Chart on fiscal deficit and account deficit.

9. Chart on rupee value aganist the dollar.

Anything else? Assuming all this is done, how will you use it?

1. is VERY important and that in itself will indicate the govt spending, direction of economy, social programs, tax revenues. 9 is directly related to 1 along with imports, GDP, productivity, exports, and oil bill, etc..

Both these will tell a lot of things about the economy and an insight into the future.

Upps: In my opinion Carvaka has spent an inordinate amount of time and effort in describing the macro picture very well. There are a lot of areas at the micro level that are causing some of you to question his conclusions.

goodcitizn wrote:

Marathadi-Saamiyaar wrote:

goodcitizn wrote:

rawemotions wrote:Any economist worth his salt will tell you that Job Growth, Debt are also important parameters for analyzing the economic management of a country. So I am making a direct point that your analysis is incomplete without this data. I am not here to find this data. 
I am saying that your analysis needs to include these for a holistic picture. Come on! Please rebut my arguments if you can, rather than pussyfooting around.

Would it be helpful if the following is done, individually, to satisfy you?

1. Chart on fiscal deficit and account deficit.

9. Chart on rupee value aganist the dollar.

Anything else? Assuming all this is done, how will you use it?

1. is VERY important and that in itself will indicate the govt spending, direction of economy, social programs, tax revenues. 9 is directly related to 1 along with imports, GDP, productivity, exports, and oil bill, etc..

Both these will tell a lot of things about the economy and an insight into the future.

Upps: In my opinion Carvaka has spent an inordinate amount of time and effort in describing the macro picture very well. There are a lot of areas at the micro level that are causing some of you to question his conclusions.

In response to your comment above, it is a problem that the fiscal deficit has gone up to around 6.2% of GDP when FRMB Act of 2003 calls for a ceiling at 3%. The other concern is that not only the rate of increase in public expenditure is going up compared to the rate of revenue generated but also that public capital expenditure (which helps improve infrastructure) has dropped from about 3.6% of GDP during 2004-05 to barely above 1% last year. OTOH revenue expenditure has escalated from 12.2% of GDP during 2004-05 to over 16% last year. So the government has spent more on subsidies and band aid corrections than on investing in infrastructure.



Just over the last two years the credit rating of India has worsened drastically. The rupee has taken a beating. FDI's and FII's have also shown a downward trend which the government is trying to correct by lifting restrictions on foreign investments in retail, healthcare and industrial sectors. Inflation continues to be a concern.

The biggest problem, the elephant in the room that no one wants to tackle, is black money. While the average tax payer does his bidding, the rich people in businesses and politicians in general have created a whole industry consisting of chartered accountants whose main job is to cheat the government as much as possible from getting the money legally due to it. RBI has brought out several measures to combat tax evasion especially in the banking and financial areas but there are still too many loop holes that are not plugged albeit well known.

Besides, do you think an average MLA or MP will understand any of the charts and figures Carvaka presented? ;-)

rawemotions wrote:

goodcitizn wrote:

Marathadi-Saamiyaar wrote:

goodcitizn wrote:

rawemotions wrote:Any economist worth his salt will tell you that Job Growth, Debt are also important parameters for analyzing the economic management of a country. So I am making a direct point that your analysis is incomplete without this data. I am not here to find this data. 
I am saying that your analysis needs to include these for a holistic picture. Come on! Please rebut my arguments if you can, rather than pussyfooting around.

Would it be helpful if the following is done, individually, to satisfy you?

1. Chart on fiscal deficit and account deficit.

9. Chart on rupee value aganist the dollar.

Anything else? Assuming all this is done, how will you use it?

1. is VERY important and that in itself will indicate the govt spending, direction of economy, social programs, tax revenues. 9 is directly related to 1 along with imports, GDP, productivity, exports, and oil bill, etc..

Both these will tell a lot of things about the economy and an insight into the future.

Upps: In my opinion Carvaka has spent an inordinate amount of time and effort in describing the macro picture very well. There are a lot of areas at the micro level that are causing some of you to question his conclusions.

Upps: In my opinion Carvaka has spent an inordinate amount of time and effort in describing the macro picture very well. 
>>For the life of me, I cannot imagine how we can describe the macro picture without factoring in at the least, Employment generation, Debt and Trade Balance.

rawemotions wrote: What you did not mention, industrialists are crying about the cost of capital, especially small and medium sized businesses. Large ones have turned to sources abroad for Capital, but in the process have further fueling debt denominated in Dollars,
- Let us not forget that Sonia Gandhi led UPA came to power claiming that they would resolve Black Money in 100 days.

goodcitizn wrote:

rawemotions wrote:

goodcitizn wrote:

Marathadi-Saamiyaar wrote:

goodcitizn wrote:

Would it be helpful if the following is done, individually, to satisfy you?

1. Chart on fiscal deficit and account deficit.

9. Chart on rupee value aganist the dollar.

Anything else? Assuming all this is done, how will you use it?

1. is VERY important and that in itself will indicate the govt spending, direction of economy, social programs, tax revenues. 9 is directly related to 1 along with imports, GDP, productivity, exports, and oil bill, etc..

Both these will tell a lot of things about the economy and an insight into the future.

Upps: In my opinion Carvaka has spent an inordinate amount of time and effort in describing the macro picture very well. There are a lot of areas at the micro level that are causing some of you to question his conclusions.

Upps: In my opinion Carvaka has spent an inordinate amount of time and effort in describing the macro picture very well. 
>>For the life of me, I cannot imagine how we can describe the macro picture without factoring in at the least, Employment generation, Debt and Trade Balance.

Somewhat of an analogy would be a general practitioner checking the overall health of a patient by taking his temperature, pulse, blood pressure, weight and any other overall complaint requiring x-ray or blood test. But if the patient wants to know about every thing from eye sight, hearing, lung capacity, cardiac functional performance, liver function etc the doctor would suggest specific specialists to examine each area for diagnosis and treatment.

rawemotions wrote:The third headline number routinely quoted in monthly stats is trade balance.

rawemotions wrote:

goodcitizn wrote:
Somewhat of an analogy would be a general practitioner checking the overall health of a patient by taking his temperature, pulse, blood pressure, weight and any other overall complaint requiring x-ray or blood test. But if the patient wants to know about every thing from eye sight, hearing, lung capacity, cardiac functional performance, liver function etc the doctor would suggest specific specialists to examine each area for diagnosis and treatment.

Cannot agree with you here. The FED themselves monitor Employment generation as a headline number  for an understanding of the economic pulse. The entire fight in US Senate/house over the past year was about another headline number. The Debt Ceiling. The third headline number routinely quoted in monthly stats is trade balance.