The Economist has other views than our Vivechana blogger

http://www.economist.com/node/18929279

Hellsangel wrote:http://www.economist.com/node/18929279

".. although his 82-year-old father, sitting in a deckchair, complains that everything went to the dogs when the British left"

Hahahhaa...Good to know that he just moved to Gujarat from the not-so-insignificant town.

I could not see the article fully on my mobile. But the chart is visible. It shows different numbers than idefix. What is the reason?

truthbetold wrote:I could not see the article fully on my mobile. But the chart is visible. It shows different numbers than idefix. What is the reason?

The numbers are compared to India's GDP increase not state by state like Idefix did. So everything else in the article lacks substance, the same general sentiment opined in the article can be applied to any of the top 5 states.

confuzzled dude wrote:

truthbetold wrote:I could not see the article fully on my mobile. But the chart is visible. It shows different numbers than idefix. What is the reason?

The numbers are compared to India's GDP increase not state by state like Idefix did. So everything else in the article lacks substance, the same general sentiment opined in the article can be applied to any of the top 5 states.

Yeah. The Economist is biased towards Gujarat.

Hellsangel wrote:

confuzzled dude wrote:

truthbetold wrote:I could not see the article fully on my mobile. But the chart is visible. It shows different numbers than idefix. What is the reason?

The numbers are compared to India's GDP increase not state by state like Idefix did. So everything else in the article lacks substance, the same general sentiment opined in the article can be applied to any of the top 5 states.

Yeah. The Economist is biased towards Gujarat.

I didn't say that but the criterion used in this article is very different from the discussion that took place on SuCh. Who knows Gujarat state may have sponsored the article.

confuzzled dude wrote:

truthbetold wrote:I could not see the article fully on my mobile. But the chart is visible. It shows different numbers than idefix. What is the reason?

The numbers are compared to India's GDP increase not state by state like Idefix did. So everything else in the article lacks substance, the same general sentiment opined in the article can be applied to any of the top 5 states.

The article is about whether a province can become an engine for the country. Ultimately for growth to be sustainable, the most important, ingredient is business friendly nature of the government and bureaucracy, and overall productivity. The business folks are very clear in this , when they say that Gujarat has been the most welcoming of all Indian states to new  business. So it is not about whether in a particular year or couple of years, whether GDP growth was equal to Gujarat, but whether the enabler and government culture fosters new business. I think in that respect no other state has received as much positive comments as Gujarat from folks who matter the business community. So when a province has to become the engine , the enabler has to be there. That is where Gujarat seems to score, because the business community who are the folks who give this rating, give the maximum ratings to Gujarat. 

Also when GDP growth of states are compared, we also have to look at how much of the growth has come because of money pumped in by central government. If Planning commission pumps in more money to a state, it will show up as GDP growth. How much  Growth shows up depends on the productivity of the state. So if we are to really compare the state's efficiency, we need to look at this aspect also. I have not seen any analysis of this recently, because deficit financing aspect of each state has never been considered, OR its accumulated debt.

In addition when GDP growth is compared, the base has to be considered. If China does 8% growth on its base, it is much more potent than 7% growth of India, because it does it with a base that is four times higher. In that fashion Maharashtra is probably the only other state which equals Gujarat because of its large base. A part of that is because 75% of India's Corporate tax gets filed from Bombay.  But we have recently seen even Maharashtrians worrying about new business going to Gujarat instead of Maharashtra. TN and Karnataka comes in the next tier in this list.

rawemotions wrote:

confuzzled dude wrote:

truthbetold wrote:I could not see the article fully on my mobile. But the chart is visible. It shows different numbers than idefix. What is the reason?

The numbers are compared to India's GDP increase not state by state like Idefix did. So everything else in the article lacks substance, the same general sentiment opined in the article can be applied to any of the top 5 states.

The article is about whether a province can become an engine for the country. Ultimately for growth to be sustainable, the most important, ingredient is business friendly nature of the government and bureaucracy, and overall productivity. The business folks are very clear in this , when they say that Gujarat has been the most welcoming of all Indian states to new  business. So it is not about whether in a particular year or couple of years, whether GDP growth was equal to Gujarat, but whether the enabler and government culture fosters new business. I think in that respect no other state has received as much positive comments as Gujarat from folks who matter the business community. So when a province has to become the engine , the enabler has to be there. That is where Gujarat seems to score, because the business community who are the folks who give this rating, give the maximum ratings to Gujarat. 

Also when GDP growth of states are compared, we also have to look at how much of the growth has come because of money pumped in by central government. If Planning commission pumps in more money to a state, it will show up as GDP growth. How much  Growth shows up depends on the productivity of the state. So if we are to really compare the state's efficiency, we need to look at this aspect also. I have not seen any analysis of this recently, because deficit financing aspect of each state has never been considered, OR its accumulated debt.

In addition when GDP growth is compared, the base has to be considered. If China does 8% growth on its base, it is much more potent than 7% growth of India, because it does it with a base that is four times higher. In that fashion Maharashtra is probably the only other state which equals Gujarat because of its large base. A part of that is because 75% of India's Corporate tax gets filed from Bombay.  But we have recently seen even Maharashtrians worrying about new business going to Gujarat instead of Maharashtra. TN and Karnataka comes in the next tier in this list.

That last sentence pretty much says it all, that all the text preceded it is pure hype. I guess IT industry thrived in Karnataka despite redtape and business unfriendly environment.

confuzzled dude wrote:

rawemotions wrote:

confuzzled dude wrote:

truthbetold wrote:I could not see the article fully on my mobile. But the chart is visible. It shows different numbers than idefix. What is the reason?

The numbers are compared to India's GDP increase not state by state like Idefix did. So everything else in the article lacks substance, the same general sentiment opined in the article can be applied to any of the top 5 states.

The article is about whether a province can become an engine for the country. Ultimately for growth to be sustainable, the most important, ingredient is business friendly nature of the government and bureaucracy, and overall productivity. The business folks are very clear in this , when they say that Gujarat has been the most welcoming of all Indian states to new  business. So it is not about whether in a particular year or couple of years, whether GDP growth was equal to Gujarat, but whether the enabler and government culture fosters new business. I think in that respect no other state has received as much positive comments as Gujarat from folks who matter the business community. So when a province has to become the engine , the enabler has to be there. That is where Gujarat seems to score, because the business community who are the folks who give this rating, give the maximum ratings to Gujarat. 

Also when GDP growth of states are compared, we also have to look at how much of the growth has come because of money pumped in by central government. If Planning commission pumps in more money to a state, it will show up as GDP growth. How much  Growth shows up depends on the productivity of the state. So if we are to really compare the state's efficiency, we need to look at this aspect also. I have not seen any analysis of this recently, because deficit financing aspect of each state has never been considered, OR its accumulated debt.

In addition when GDP growth is compared, the base has to be considered. If China does 8% growth on its base, it is much more potent than 7% growth of India, because it does it with a base that is four times higher. In that fashion Maharashtra is probably the only other state which equals Gujarat because of its large base. A part of that is because 75% of India's Corporate tax gets filed from Bombay.  But we have recently seen even Maharashtrians worrying about new business going to Gujarat instead of Maharashtra. TN and Karnataka comes in the next tier in this list.

That last sentence pretty much says it all, that all the text preceded it is pure hype. I guess IT industry thrived in Karnataka despite redtape and business unfriendly environment.

I am not sure what you are dismissing as pure hype here. Kindly clarify. The statements about the business friendly nature of Gujarat etc.. have been made umpteen times in  umpteen forums. What you OR I think here is immaterial. What matters is what they think, and these are facts.

Regarding Karnataka, many IT folks have said Bangalore developed, predominantly due to Skilled Labour (thanks to many central institutions and proximity to education institutions of repute), Climate, zero corporate tax at federal level, and because all that IT industry needed was an Internet connection and pretty much no other support from state government. Infact people had said, that IT industry developed not because of government but despite government. When Call centres and IT centres started, the bureaucracy wanted a piece of action. In the early stages, the inspectors used to come to IT offices /call centres and harrass them for not having a spittoon and get their cut. NASSCOM intervened, did the lobbying and by directly influencing central government to not kill the golden goose with archaic policies. Thankfully some folks listened in delhi and appropriate instructions were passed down the line, to save the IT industry. The state government started supporting the IT parks with real estate, infrastructures etc.., only after they started the seeing the huge benefits and growth these IT centres bring to the cities.

Regarding TN ask them how the are worried about new auto industries and associated ancilliaries now opening in Gujarat.

rawemotions wrote:I am not sure what you are dismissing as pure hype here. Kindly clarify. The statements about the business friendly nature of Gujarat etc.. have been made umpteen times in  umpteen forums. What you OR I think here is immaterial. What matters is what they think, and these are facts.

Regarding Karnataka, many IT folks have said Bangalore developed, predominantly due to Skilled Labour (thanks to many central institutions and proximity to education institutions of repute), Climate, zero corporate tax at federal level, and because all that IT industry needed was an Internet connection and pretty much no other support from state government. Infact people had said, that IT industry developed not because of government but despite government. When Call centres and IT centres started, the bureaucracy wanted a piece of action. In the early stages, the inspectors used to come to IT offices /call centres and harrass them for not having a spittoon and get their cut. NASSCOM intervened, did the lobbying and by directly influencing central government to not kill the golden goose with archaic policies. Thankfully some folks listened in delhi and appropriate instructions were passed down the line, to save the IT industry. The state government started supporting the IT parks with real estate, infrastructures etc.., only after they started the seeing the huge benefits and growth these IT centres bring to the cities.

Regarding TN ask them how the are worried about new auto industries and associated ancilliaries now opening in Gujarat.

 
 
Sir, it is hype when someone suggests businesses grew in KA, TN & AP in spite of the hurdles created by the local govts ( somehow businesses fell in love with those states) and are 2nd tier to Gujarat & in the same breath says Gujarat's growth occurred only because of Modi & his policies. BTW, I'm not dismissing Gujarat's development as rubbish rather saying that is comparable to other top states.

Cd,
why is comparing India vs Gujarat wrong? why other state performance disqualify that type of analysis? is there another state contributing 22% of exports?

truthbetold wrote:Cd,
why is comparing India vs Gujarat wrong? why other state performance disqualify that type of analysis? is there another state contributing 22% of exports?

 
 
I did no such thing; I merely answered your query as to why the numbers are different from that of Idefix's [analysis].

confuzzled dude wrote:

rawemotions wrote:I am not sure what you are dismissing as pure hype here. Kindly clarify. The statements about the business friendly nature of Gujarat etc.. have been made umpteen times in  umpteen forums. What you OR I think here is immaterial. What matters is what they think, and these are facts.

Regarding Karnataka, many IT folks have said Bangalore developed, predominantly due to Skilled Labour (thanks to many central institutions and proximity to education institutions of repute), Climate, zero corporate tax at federal level, and because all that IT industry needed was an Internet connection and pretty much no other support from state government. Infact people had said, that IT industry developed not because of government but despite government. When Call centres and IT centres started, the bureaucracy wanted a piece of action. In the early stages, the inspectors used to come to IT offices /call centres and harrass them for not having a spittoon and get their cut. NASSCOM intervened, did the lobbying and by directly influencing central government to not kill the golden goose with archaic policies. Thankfully some folks listened in delhi and appropriate instructions were passed down the line, to save the IT industry. The state government started supporting the IT parks with real estate, infrastructures etc.., only after they started the seeing the huge benefits and growth these IT centres bring to the cities.

Regarding TN ask them how the are worried about new auto industries and associated ancilliaries now opening in Gujarat.

 
 
Sir, it is hype when someone suggests businesses grew in KA, TN & AP in spite of the hurdles created by the local govts ( somehow businesses fell in love with those states) and are 2nd tier to Gujarat & in the same breath says Gujarat's growth occurred only because of Modi & his policies. BTW, I'm not dismissing Gujarat's development as rubbish rather saying that is comparable to other top states.

As on today, what matter is not what you OR i think, but what the real business folks say. It is quite clear that the business friendly nature of Gujarat's bureaucracy provides an enabling environment for new business to be created there. No other state is being spoken off in the same breath as Gujarat, from the folks who matter (business). That comes out loud and clear, and in umpteen magazine articles and in many such forums repeatedly. That is exactly what economist is highlighting here, the enabler for growth. 

Regarding the KA/TN issue I originally referred to them to indicate that they are next big states with good GDP growth and size comparable to biggies. But the term "despite the government" that I referred is basically always used in Indian context to say that Bureaucracy is NOT supportive as other countries (China for example) and not to say that somebody would go out and out impede development. It is in with the same meaning that i used it above.


Classic example would be that a project would be sanctioned in the state government and held up in Central government and vice versa. Another example, is the in state government the amount of time taken to approve a business would be longer than normal OR that once a state government approves a business the next state government changes policies to slow them down. So the issue here is that business growth is NOT actively enabled by the state with assistance in  factors of production (land, labor, capital, technology , Telecom, power , road, port and logistics infrastructure). Here the state has a role to play in Land, Power, other infrastructure, resources and to a certain extent even capital, and foster policies to attract skilled labor.  The question is how proactive a state has been in all these.

 Even now multiple projects exceeding 1000 Crores each have been sanctioned by Gujarat state, but held up at the central government level, thus depriving Gujarat of new business. Unfortunately Congress is allegedly playing politics here instead of thinking of the overall development of the country. With the recent economic stagnation and rupee devaluation, CCI was created by PMO to expedite investment. Gujarat has now approached the newly created CCI. Atleast now, let us see whether  Congress eschews playing favorites in industrialization OR still only thinking of how to create factories in Rae Bareli.