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Can Pakistan learn from the mess Modi has created in India's economy

#1: GDP manipulation: They only tell you part of the changes to cover their footprints. If you look at serious studies of the formula changes in the GDP done by classical economists you will see what else is being counted as "production" but it should be subtracted if counted at all. For example, take the selling of public roads (built with tax payers money). The money made by the private co is included as "production" however, these company use sensors to know when your car enters and exits their toll road; they are earning without hiring anyone to man the toll-booths any more. In fact, these deals have a negative impact on real production: because my cost of doing business (transporting my manufactured goods) has only gone up as well as my cost of going to work has gone up. Another example of redistribution of wealth to fewer and fewer hands. (More importantly) Apple and other companies have manufacturing in China because its China that provides the infrastructure making them cost competitive despite the rising wages.

India's GDP measurement definitely needs improvement. But whatever we have been using works.

#2: Sure let's give him another year.
  • You would be right if India mostly controls its own economy today. ie fixing GST implementation and the availability of cash for transactions would be enough to kick things into high gear of +7%-8% GDP change.
  • You would be wrong if India imports lots of commodity and the prices of which have firmed up. ie no more easy lunch as oil has bounced from USD $30/barrel to $50; not to mention the lack of private investments and the problems of bank NPAs.
I am in the 2nd camp for variety of reasons. The biggest of them is what is likely going on behind the scenes. India is skipping the industrial phase (mostly) and becoming a service economy. Service economies by their very nature tend to have a smaller middle class; think Madagascar, an extreme example, living off of servicing tourists. Here is a link to a concise summary by a report from a Sri Lankan (Modi introduces a GST to soothe the neocons) on what, why and how of the drastic changes and why it's bad for 495 million poor people of India.

For India, the US shale oil is a boon. The world will always get competitive rates because of that. Even though commodity prices are rising, so is demand. Rising demand means increase in investment, so more jobs.

At 62% of the GDP, India is a services economy. Industry is less than 25%, manufacturing is only at 17%. Modi wants to improve manufacturing to 20%+ by 2022. That's why the Make in India policy.

#3: Your prediction for the remaining 3 quarters of FY18:
FY-18, Q2: 6%
FY-18, Q3: 7.3%
FY-18, Q4: 7.7%

Let's reconvene in June of 2018. Inshallah I will comeback to this thread and post the results; whether right or wrong I will post what has been reported.

:enjoy:

We won't have to wait until June 2018. By Feb we will see the trend.

Anyway--
http://www.livemint.com/Industry/CG...expectedly-expands-in-August-as-orders-b.html
 
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