"Never Trust What People in Indian Business Say": Bloomberg

[Khanivore]

I always knew the economy in India was highly exaggerated. Overhyped. That's why India never really took off and the infrastructure stagnates, the supply chain and logistical network is just piss-poor.

Funnily enough, their tech. support scam sector has really grown to become world famous, beating the Nigerian scammers.

 

[Gandhi G in da house]

I always knew the economy in India was highly exaggerated. Overhyped. That's why India never really took off and the infrastructure stagnates, the supply chain and logistical network is just piss-poor.

Funnily enough, their tech. support scam sector has really grown to become world famous, beating the Nigerian scammers.

Don't disagree with what he says, but don't impute his statement to Bloomberg. He is an opinion columnist for Bloomberg and this is his opinion not that of Bloomberg itself.

 

[Robbie]

I always knew the economy in India was highly exaggerated. Overhyped. That's why India never really took off and the infrastructure stagnates, the supply chain and logistical network is just piss-poor.

Funnily enough, their tech. support scam sector has really grown to become world famous, beating the Nigerian scammers.

Limited understanding of the Indian economy and selective hearing will not lead you anywhere.

Mihir Sharma has rightly pointed out that the private investment in India has been declining for nearly a decade. What he does not say are the causes and the results. The cause was unregulated large scale lending by banks to big businesses with nearly zero quality control. This led to 3 results:

1. The economic slowdown started because Congress left record fiscal deficits with ballooning wasteful subsidies. This meant the State's ability to invest in new infrastructure collapsed
2. Businesses who were merely running on their rent-seeking skills and bank loans collapsed when the new Govt. came in power. A large number of big businesses houses in India come in this category
3. Most big banks in India are state-run and they were running ponzi schemes on taxpayer money. The businesses could never repay their old loans and so calls from Congress to banks made them keep giving new loans with which the business used to repay old loans. It's called evergreening.
4. No bankruptcy law present (makeshift and ineffective laws existed) which meant that company owners used the legal system to stay afloat and keep running the companies even when they failed in the market and could not honour their contracts.

Basically in India, losses were socialized while profit was privatized.

This is the scenario that BJP inherited. They did the following:

1. Bring a new law for bankruptcy law that meant that any business big or small, if it goes bankrupt, will go to court and be liquidated or bought by another company. This was challenged massively by big businesses but SC upheld the law.
2. Stopped the culture of evergreening loans. If a bank loan goes bad, the bank is forced to recognize it and initiate legal proceedings against the company. They can't hide it anymore
3. This led to very large companies as well as banks crashing
4. Instituted new regulations and regulators for Accounting because CA's were gaming the system
5. Initiated GST which has for the first time forced many industries to come under the tax net. Tax reporting has dramatically increased (# taxpayers have multiplied)
6. Demonetization of over 80% of Indian currency

As you can see all the above 6 moves are shocks to the system. However, except for demonetization, they are essential shocks to the system and this qualitative change was necessary if the Indian economy has to keep growing. Our old legal, regulatory, and social systems for business could no longer support the growing needs of the economy. The economy reached nearly $2.5 trillion with the same social and legal structures but to reach $5 trillion and beyond, a change was needed.

There are two criticisms of BJP's handling of the economy:

1. Demonetization was a disastrous shock to the system and was entirely avoidable.
2. GST implementation was botched. It's better now after nearly 4 years.

Regardless, there has been a sea change in business culture across India. And though the economy is growing much slower than before, when it bounces back, the quality of growth will be much better and cleaner.

 

[Khanivore]

Limited understanding of the Indian economy and selective hearing will not lead you anywhere.

I'll save us both the time and cut to the chase.

Firstly; why has India stagnated so badly compared to China? India and badly starved and hit China (by the Japanese during WW2), both literally started on equal footing back in early 50s, late 50s. Fine, Nixon paved the way (via Pakistan) for business and trade deals to be done with China, but why was India sleeping? This IMO cost India massively.

And secondly; India seems to be never grasping a simple strategy: how to build infrastructure and localise logistical network. This, plus the lack of any skilled labour force is the hindering factor behind serious drive to bring in manufacturing from around the world. India has every opportunity to cut into China's economical gains but with failed policies, debt, and bureaucracy over land, tariffs and the public sector - to name a few - will continue to strangle your economy.

The sea of change in business culture is just words. COVID-19 has just screwed the world over. Will India make it through and come out to grow into the next China? Slim chance. The West will never allow another China to pop up. India enslaved and kept in check? Absolutely.

 

[Han Patriot]

I'll save us both the time and cut to the chase.

Firstly; why has India stagnated so badly compared to China? India and badly starved and hit China (by the Japanese during WW2), both literally started on equal footing back in early 50s, late 50s. Fine, Nixon paved the way (via Pakistan) for business and trade deals to be done with China, but why was India sleeping? This IMO cost India massively.

And secondly; India seems to be never grasping a simple strategy: how to build infrastructure and localise logistical network. This, plus the lack of any skilled labour force is the hindering factor behind serious drive to bring in manufacturing from around the world. India has every opportunity to cut into China's economical gains but with failed policies, debt, and bureaucracy over land, tariffs and the public sector - to name a few - will continue to strangle your economy.

The sea of change in business culture is just words. COVID-19 has just screwed the world over. Will India make it through and come out to grow into the next China? Slim chance. The West will never allow another China to pop up. India enslaved and kept in check? Absolutely.

Good analysis. India has all the potential in name only. They will always somehow manage to screw it up. This crisis will strengthen Chjna at the detriment of the West. Saudis and Russians are already hinting at abandoning the dollar$ system and EU is in disarray. China will profit the most, after all our economy need raw materials and markets. We need Saudi and Russian Oil and Minerals. We need EU technology and markets. We are seeing the great deglobalization and de coupling. Instead of decoupling China, US just destroyed the petrol dollar. EU giants had always been pissed with US dominance, with UK out, EU will be fighting for a deal with China. However pissed they are with China, they need the Chinese Market and cheap goods.

 

[Robbie]

I'll save us both the time and cut to the chase.

Firstly; why has India stagnated so badly compared to China? India and badly starved and hit China (by the Japanese during WW2), both literally started on equal footing back in early 50s, late 50s. Fine, Nixon paved the way (via Pakistan) for business and trade deals to be done with China, but why was India sleeping? This IMO cost India massively.

I agree

And secondly; India seems to be never grasping a simple strategy: how to build infrastructure and localise logistical network. This, plus the lack of any skilled labour force is the hindering factor behind serious drive to bring in manufacturing from around the world. India has every opportunity to cut into China's economical gains but with failed policies, debt, and bureaucracy over land, tariffs and the public sector - to name a few - will continue to strangle your economy.

I agree

The sea of change in business culture is just words. COVID-19 has just screwed the world over. Will India make it through and come out to grow into the next China? Slim chance. The West will never allow another China to pop up. India enslaved and kept in check? Absolutely.

India will not be another China. No country will. But will India be kept enslaved? Very simplistic thinking and the answer to that is No.

While you look to critique, India is making those very changes you raise as problems. Rather slowly, but surely. Public sector sell-off is beginning, the private sector is being involved.

The goal is not to be China. The goal is to improve people's lives, create opportunities for Indians, and secure Indian interests. With cleaner governance and better policies, India will steadily keep moving up the socio-economic ladder.

 

[Han Patriot]

I agree


I agree


India will not be another China. No country will. But will India be kept enslaved? Very simplistic thinking and the answer to that is No.

While you look to critique, India is making those very changes you raise as problems. Rather slowly, but surely. Public sector sell-off is beginning, the private sector is being involved.

The goal is not to be China. The goal is to improve people's lives, create opportunities for Indians, and secure Indian interests. With cleaner governance and better policies, India will steadily keep moving up the socio-economic ladder.

India wanted to be the next China but sorry it will never happen. This crisis shows the world which country can organise and which ones are failed states.

 

[Khanivore]

India will not be another China. No country will. But will India be kept enslaved? Very simplistic thinking and the answer to that is No.

While you look to critique, India is making those very changes you raise as problems. Rather slowly, but surely. Public sector sell-off is beginning, the private sector is being involved.

The goal is not to be China. The goal is to improve people's lives, create opportunities for Indians, and secure Indian interests. With cleaner governance and better policies, India will steadily keep moving up the socio-economic ladder.

Look, I hate to be boring so I simplify my opinion a bit bluntly, so forgive me if I come across as a simple thinker.

Anyway, you know what my wish is? India and Pakistan, together with their other neighbours should form a trade block and do trade and help each other build an economic union that Africa and the Middle hook into. I'd love to see all the silly differences that hinder any chance for development to be put aside. All the squabbling over borders and territory has done nothing but kept the whole South Asia in a stranglehold. You're entirely in you're right to disagree with me.

Good analysis. India has all the potential in name only. They will always somehow manage to screw it up. This crisis will strengthen Chjna at the detriment of the West. Saudis and Russians are already hinting at abandoning the dollar$ system and EU is in disarray. China will profit the most, after all our economy need raw materials and markets. We need Saudi and Russian Oil and Minerals. We need EU technology and markets. We are seeing the great deglobalization and de coupling. Instead of decoupling China, US just destroyed the petrol dollar. EU giants had always been pissed with US dominance, with UK out, EU will be fighting for a deal with China. However pissed they are with China, they need the Chinese Market and cheap goods.

I think you could be right but NATO's movements, preparations seem to suggest that WW3 is on the verge. I hope I'm so wrong.

 

[riscol]

India has lost the competition a long time ago. The naysayers are still sleeping and with Covid-19 creating a global pandemic disupting the global economy way worse than what happened in 2008 whatever growth India was expecting in the upcoming years can now be forgotten. With or without Covid-19 India was out of the race way before as it was left behind the dust, the distance can never be caught up. The race was long over but the seats were still occupied by the naysayers with eyes glued to the big screen.

 

[Robbie]

Look, I hate to be boring so I simplify my opinion a bit bluntly, so forgive me if I come across as a simple thinker.

Anyway, you know what my wish is? India and Pakistan, together with their other neighbours should form a trade block and do trade and help each other build an economic union that Africa and the Middle hook into. I'd love to see all the silly differences that hinder any chance for development to take place. All the squabbling over borders and territory has done nothing but kept the whole South Asia in a stranglehold. You're entirely in you're right to disagree with me.

There is good trade between India, BD, Nepal and BD. Since the land and sea borders between India, BD and Myanmar were resolved and signed, there has been movement on many proposals including free movement of vehicles among other aspects.

But I don't think any trade block is possible right now even between India, BD, Bhutan and Nepal, let alone one including Pakistan. The new Indian Govt. is severely protectionist. They have increased import tariffs across the board. And they have abstained from joining RCEP. This is also the reason why India is failing to conclude FTAs with country after country.

Ideally speaking though, yes, a trade bloc would make a lot of sense, particularly as the South Asian economies are mostly complementary to each other.

India wanted to be the next China but sorry it will never happen. This crisis shows the world which country can organise and which ones are failed states.

You have yet to see how the ramifications of this crisis play out in different spheres. If you think China has come out of this as a winner, you are mistaken.

 

[Khanivore]

India has lost the competition a long time ago. The naysayers are still sleeping and with Covid-19 creating a global pandemic disupting the global economy way worse than what happened in 2008 whatever growth India was expecting in the upcoming years can now be forgotten. With or without Covid-19 India was out of the race way before as it was left behind the dust, the distance can never be caught up. The race was long over but the seats were still occupied by the naysayers with eyes glued to the big screen.

It's now extremely hard to see India catching up with China, but there is one thing both India and Pakistan can do: ride on the economic success of China. Build a block in the South Asia; become strong trade partners > strong economies. Put aside all the negativity and focus on building something that the people of your nations can admire and not be forever stuck in stinking backwardness, debt and poverty.

Actually the crisis shows which country is dirt filthy and a danger to human existence. Filthy wet markets all around selling everything from deer penis to Pangolin balls, that's what i call a failed state.

Dude. Kindly cut the repetitive anti-China crap. It's getting boring.

 

[riscol]

There is no catching up because it is not possible but India can still grow and develop like other third world countries. How to catch up if you already lost the competition? If it was possible to catch up to China that would mean India can rival China toe to toe.

 

[Khanivore]

The new Indian Govt. is severely protectionist.

Funnily enough, Trump, Boris and Modi all seem to have same ideology.

 

[Khanivore]

You have yet to see how the ramifications of this crisis play out in different spheres. If you think China has come out of this as a winner, you are mistaken.

This is something everyone is waiting to see. Frankly speaking, as much as it may be painful, I'm afraid the setback for the Indian economy - including Pakistan, could well be quite bad. China will pull through, even after this COVID-19 pandemic.

Not until the virus pandemic is over. And if there are more than 1 million deaths, then probably never.

What's the annual mortality rate of India per year on average?

 

[Baba_Yaga]

What's the annual mortality rate of India per year on average?

Doesn't matter, that is life. Road accidents, murder, cancer etc. This one is caused by China