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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: elmatador who wrote (7511)	7/9/2006 12:07:17 PM
From: arun gera	Read Replies (1) \| Respond to of 218107

The Myth of the New India >Many serious problems confront India. They are unlikely to be solved as long as the wealthy, both inside and outside the country, choose to believe their own complacent myths.> Yes. There are serious problems in India. They will take time to be solved. However, the complacent myths are better than the despair and hopelessness that was the prevailing view of the same group of people. >This sounds persuasive as long as you don't know that Mr. Mittal, who lives in Britain, announced his first investment in India only last year. He is as much an Indian success story as Sergey Brin, the Russian-born co-founder of Google, is proof of Russia's imminent economic superstardom.> What is the agenda of the author? Laxmi Mittal grew up in India just as Sergey Brin grew up in USA. The comparison is not valid. Mr. Mittal is a representative of the tough Indian business communities who can build successful, businesses anywhere. He belongs to the Marwari caste, well-known in India for being traders and moneylenders who figure prominently in the leading business houses of India. time.com >It was not so long ago that India appeared in the American press as a poor, backward and often violent nation, saddled with an inefficient bureaucracy and, though officially nonaligned, friendly to the Soviet Union. Suddenly the country seems to be not only a "roaring capitalist success story" but also, according to Foreign Affairs, an "emerging strategic partner of the United States." To what extent is this wishful thinking rather than an accurate estimate of India's strengths?> In the scheme of things, the perception in American eyes seem to matter more than the realities of foreign nations(think Iraq's threat to US...) So the American view of India pre-2000 was just a perception reinforced by media that closed any entry of real news of India's industrial and educational progress since the 1970s. Now that the media has rediscovered India, they have gone to the other extreme of painting too bright a picture. >But the increasingly common, business-centric view of India suppresses more facts than it reveals. Recent accounts of the alleged rise of India barely mention the fact that the country's $728 per capita gross domestic product is just slightly higher than that of sub-Saharan Africa and that, as the 2005 United Nations Human Development Report puts it, even if it sustains its current high growth rates, India will not catch up with high-income countries until 2106.> India has 72 percent people of its population in agarian society and 28 percent in urban society according to 2001 statistics. That had not changed significantly in percentages from 1991 (74 percent rural). So it is going to take a while to improve the economic lot of the majority of Indians. Unless the products and services sold by rural india have relative pricing power with respect to Indian or foreign consumers, there is no way it can purchase the goods whose possession is well known as a marker of economic prosperity. Poverty in rural india is not mainly because of the stupidity or lack of intelligence of the masses. It is mainly because most rural folks are in a commodity business with endemic risks. Now they can acquire "urban" buying power by sending their smarter kids to work in the cities, just like India started out in outsourcing by sending its smartest urban workers to work in the US and middle east from 1980 to 2000. Although rural to urban migration has been going on for sometime, the job opportunities were still more in the unorganized sector in the 4 largest metros, the dominant urban centers since the British times. Now organized sector is consciously moving to the smaller cities. It may be possible that the urban/rural ratio will go up more significantly in the next 20 years. Once the ratio reaches 40 percent, the relative buying power of rural india will automatically improve. >Since the early 1990's, when the Indian economy was liberalized, India has emerged as the world leader in information technology and business outsourcing, with an average growth of about 6 percent a year.> Misleading sentence. The IT/BPO growth rates have been more like 25 percent a year. >The potential for conflict — among castes as well as classes — also grows in urban areas, where India's cruel social and economic disparities are as evident as its new prosperity. The main reason for this is that India's economic growth has been largely jobless. Only 1.3 million out of a working population of 400 million are employed in the information technology and business processing industries that make up the so-called new economy.> True so far. But the author is locked into a viewpoint that India can only compete in the IT/BPO area. That perception will be changed in the next 10-20 years. -Arun