Paris Presentation on India-China Economics
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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 form of government but a very raucous DEMOCRACY. 04/27/23Mohan Guruswamy 1
Meet India!
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The major contributors to WGDP growth 2000-10
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Who contributes how much to world growth 2010-19.
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But a fast take-off for India!
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Why everybody is excited about India?
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India’s rising youth (16-34 yrs) cohort 2000-2030.
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Is this the right education?
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India’s burgeoning middle-class.
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India’s late surge!
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Not a bad performance at all!
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Banking crisis.
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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.
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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
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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.
Why 7% is such a high mountain?
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FDI trends.
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Sector-wise FDI inflows into India.
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Sector Amount in Rs. Crores
Percentage
Information Technology 2449.32 20.21
Telecommunications 531.95 4.39Fuels (Power & Oil Refinery) 520.94 4.30
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.
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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.
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India’s Investment closing in on China’s (% of GDP).
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Centralization in India: Administrative Expenditure.
Central Govt.
expenditure
State Govt. expenditur
eLocal
Authorities Central Govt. share
in Total Administrative
Expenditure(%)(in Rs. Crores)
1960 365 525 141 35.001965 990 881 339 44.801970 1514 1540 630 41.101975 3072 2935 993 43.891980 4589 6029 1702 37.251985 11112 13075 3047 40.801990 22815 28653 6410 39.421995 44850 55746 12746 39.572000 99965 120190 27250 40.412004 101045 141334 32535 38.10
Source : National Accounts Statistics 2005
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Decentralization in China
Source: Chinese Statistical Yearbook 2005
27.720592.817894.082004
30.117229.857420.102003
28.97672.583125.601998
28.33330.241312.061993
31.51935.01888.771989
53.9649.90759.601983
47.4589.90532.101978
55.6359.45449.331973
61.3138.35219.491968
57.9139.74192.311963
44.3223.14177.221958
73.957.16162.051953
(100 million yuan)
Share of CentalGovt. Expenditure in total expenditure
(%)
Local Govt. Expn.
Central Govt. Expn.Year
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Central Govt. salaries % GDP
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Reform & Perform or Perish.
Industrialize to create jobs.Educate and vocationalize youth for
jobs in industrial sector. Reduce undersupply.
Invest in irrigation to reduce ecological damage and increase farm productivity. Consolidate holdings.
Build infrastructure. Eliminate Roads. Ports and Railway bottlenecks.
Speed reforms to make power sector profitable and investment worthy, labor productive and India investment friendly.
Address regional inequality issues.Cut down subsidies.Reform government and
decentralize.
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The Buland Darwaza or Gate to Greatness at Fatehpur Sikri.
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International Trade as a % of GDP.
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