Panagariya: India - Emerging Giant -7/7

[hindsky]

India really deserve to be a Super Power Nation and its going that path very fast Some countries already considered India as a Super Power....

[fizzboh]

Wow.. did not know that France slakes 80% of its power needs with Nuclear power. Developing nations need to buy/use this know how for safe harnessing of nuke-power!

[KashifHKhan]

PART VIII:

Finally, Dr. Panagariya makes the following interesting observations: (a) China has yet to pay "the cost" of democratizing its system, (b) Indian financial sector is better developed than China's (d) female participation in work force has improved; still, female education lags men's, (d) Indian "brain drain" should be viewed as "brain trust" (due to help of expats with development of country), and (e) trade is expanding regionally; China is now 2nd largest trading partner.

-Kashif

[roykots]

Kashif, these are some good videos you have posted, albeit it appears a bit old from the comments of professor.

Thank you!

[KashifHKhan]

PART VII:

Higher and primary education systems need significant improvement as well. According to Dr. Panagariya, higher education system is not expanding. (Most Indians are fixated on IITs and IIMs; they graduate too few students). There are no private universities; barriers to entry are too high. Primary education is improving but at a very slow pace; government should issue vouchers to help people choose between public and private education (as private education is vastly superior).

-Kashif

[KashifHKhan]

PART VI:

Some challenges remain, foremost being high concentration of labor force in agriculture (55% of work force, 16% of annual income). This is because of poor performance of labor-intensive manufacturing industries (apparel, footwear, toys, etc.) due to: (a) unreliable energy supplies, and (b) restrictive labor laws (difficult to reassign workers, impossible to fire). Firms can't build scale (to compete with Chinese firms). Political parties are loath to reform due to labor unions.

-Kashif

[KashifHKhan]

PART V:

Not surprisingly, the turnaround in 1991 involved cancellation of investment licensing and import licensing mechanism. This meant, of course, business could deploy capital freely as well as import machinery freely. Tariffs were also drastically cut (from 350% in 1990 to around 10%), foreign direct investment permitted, licensing for consumer goods removed (in 2001, to increase domestic competition), and services liberalized (to improve quality via investment and competition).

-Kashif

[KashifHKhan]

PART IV:

It is equally interesting to hear why India abandoned its development model in 1990: (a) collapse of Soviet Union (which had provided India with a socialized economic model), and (b) double-digit growth rates of China throughout 1990s (demonstrating that a country with as big a population as India could achieve superb growth with the right development model. Indian leadership had tended to dismiss growth of Korea and Singapore on the grounds that their populations were tiny).

-Kashif

[KashifHKhan]

PART III:

It is fascinating to hear why India could not achieve stellar growth rates till 1990: (a) investment licensing scheme (that allowed govt. to dictate plant/machinery decisions), (b) small scale industry reservations (that protected products in labor intensive industries and prevented firms for increasing in size), (c) high important tariffs (that protected domestic firms from competition, and (d) export restrictions (that took away incentive to build scale or improve quality).

-Kashif

[KashifHKhan]

PART II:

Despite regional inequality in growth (Western regions growing faster than Eastern ones) and concentration of most growth in urban areas (as opposed to rural ones), there has been a significant reduction in poverty: 27% of population was living below poverty line in 2007 compared to 45% in early 1980s. The growth is expected to continue due to: (a) increasingly younger demographics (which increases savings and migration), and (b) very high savings rate (nearly 30-35% of GDP).

-Kashif

[KashifHKhan]

PART 1:

The economic rise of India over the past two decades is one of the most important developments of recent history and is expected to define 21st century. The scale of transformation is staggering. In real dollar terms, the economy grew at an annual rate of 13% during 2003-07 compared to 3-4% in 1990. Foreign Direct Investment increased to $30-35 billion in 2007 from $100s of million in 1990. Each month 8+ million phones are being installed; total phones in 1990 were 5 million!

-Kashif