Is India a big market a big lie?

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@avinandan012 You're not first person to doubt this claim.

India’s missing middle class

Multinational businesses relying on Indian consumers face disappointment

www.economist.com

https://www.outlookindia.com/website/story/business-news-long-wait-for-prosperity-a-close-look-at-indias-shrinking-middle-class/396223

The shrinking middle-class

The dynamic class has been hit by the ‘pandemic’ blow

www.thehindubusinessline.com

However the government is not in the mood research reality: https://indianexpress.com/article/opinion/editorials/consumer-expenditure-survey-2022-7989599/

I think the middle class that was promised since the liberalisation in the 1991 was never really realised on the scale and potential that was marketed.
And we barely question it since most of us live in cities and are surrounded by people whose lifestyles are more or less similar to us. However, the reality is clear to many international companies which is why most of them don't operate here.

This is not news. It has been the damn norm since 1991 to doubt any claim. Always downer type news. But we constantly kept growing and still are. Of course, people found ways to slam even that. All this negative stuff is just attention-seeking. So glad nobody listens to these so-called experts any longer and prefers others that give us hope about the future.

There is a thread here around the last general election in 2019 where people getting migraines imagining India as a $5tr economy. Nobody talks about that anymore, now it's about getting to $10tr and beyond

India's growth is unstoppable because it's unassisted, we did it on our own unlike those three ahead of us who will be surpassed in time. A matter of when not if.

 

[t3chg33k]

India's growth is unstoppable because it's unassisted, we did it on our own unlike those three ahead of us who will be surpassed in time. A matter of when not if.

The growth is largely fuelled by FDI. Even startups are funded mostly by overseas VCs. If the market slump during Covid is any indication, FDIs can and will pull out in case of any adversity.

The growth needs to be fuelled by indigenous development in manufacturing and services where India is still lagging behind tremendously. A lot of foreign money is staying in India for now because it is believed to be a growth story, which has to be followed up on and executed.

 

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^I am talking about how India got to where it is today since 1947

Unassisted. This word matters

India made up a third of the world's GDP for almost two millennia. We will revert back to that former position in time.

In 1947 we accounted for just 2% of it. It took just 150 years to reduce us to that state. 1815 was the last time our GDP still exceeded that of Britain.

Our boundaries were not defined at independence, we have had no peace dividend to speak of. Yet we still grew.

Hence unstoppable

 

[t3chg33k]

^I am talking about how India got to where it is today since 1947

Unassisted. This word matters

India made up a third of the world's GDP for almost two millennia. We will revert back to that former position in time.

In 1947 we accounted for just 2% of it. It took just 150 years to reduce us to that state. 1815 was the last time our GDP still exceeded that of Britain.

Our boundaries were not defined at independence, we have had no peace dividend to speak of. Yet we still grew.

Hence unstoppable

1991 Indian economic crisis - Wikipedia

en.m.wikipedia.org

Till 1991, whatever trade existed was coming from the Eastern Bloc. India still had a bigger economy than China at that point. India is 3 decades late to the party, but like China, the growth is fuelled by liberalisation.

India does not have a large captive market that China does now on account of western money. It will need to replace China primarily in manufacturing to become prosperous and I hope the policies increasingly reflect that. India's "unstoppability" will depend on how it can leverage it's relationship with other countries now.

 

[gourav]

will need to replace China primarily in manufacturing to

It's not possible for India (or any country for that matter) to replace China in manufacturing.

 

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It's not possible for India (or any country for that matter) to replace China in manufacturing.

Nor should we try to

1991 Indian economic crisis - Wikipedia

en.m.wikipedia.org

Till 1991, whatever trade existed was coming from the Eastern Bloc. India still had a bigger economy than China at that point. India is 3 decades late to the party, but like China, the growth is fuelled by liberalisation.

China's growth was assisted. Ours was not. China had a 40 year peace dividend. we did not. This is what you miss when you use terms like late to the party.

India does not have a large captive market that China does now on account of western money. It will need to replace China primarily in manufacturing to become prosperous and I hope the policies increasingly reflect that. India's "unstoppability" will depend on how it can leverage it's relationship with other countries now.

China wants access to other markets while denying access to its own. What captive market.

Only India can compete with China in terms of PPP. That is why only an Indian worker can replace a Chinese worker.

 

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Good discussion

Why are we ahead of the rest? see attached

Not such a generous fiscal stimulus during th pandemic meant we don't face the inflation of countries that went crazy printing money.

I remember the Economist slamming the govt policy on fiscal stimulus as tight, they forgot to mention we fed 800m people during this time,

Policy about Russian oil has kept inflation down relatively as well.

Growing the economy depends on sound management and that is just what was done.

 

[gourav]

Not such a generous fiscal stimulus during th pandemic meant we don't face the inflation of countries that went crazy printing money.

I remember the Economist slamming the govt policy on fiscal stimulus as tight, they forgot to mention we fed 800m people during this time

~5 million dead people would like to disagree

 

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~5 million dead people would like to disagree

The official figure says a tenth. Not going to argue

Countries with welfare systems have an incentive to pad their numbers up. We don't have such a setup

Died of covid vs. with Covid. Latter will be larger.

But then people say but how can it be possible? Well, talk to the right people and you will know.

90% of people in India are under the age of 60. In the ME & Africa, two thirds are under the age of thirty. Yet everybody said oh it will it be bad. Turns out it was worse in their own Western countries.

Now think how many will die in a country that does not have nursing homes where most look after their elderly.

 

[guest_999]

I remember the Economist slamming the govt policy on fiscal stimulus as tight, they forgot to mention we fed 800m people during this time,

You should focus on this line when talking about India becoming the next economic superpower. Trillions of dollar economy is not the only thing, there is also something called per capita gdp where India is almost 6 times behind of even China let alone developed nations.

 

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You should focus on this line when talking about India becoming the next economic superpower. Trillions of dollar economy is not the only thing, there is also something called per capita gdp where India is almost 6 times behind of even China let alone developed nations.

What is an economic superpower? I only understand the term in a military context. As being able to project power far from one's shores.

Raising the per capita GDP is something we should strive for. Where there is nobody left below the poverty line.

 

[guest_999]

What is an economic superpower? I only understand the term in a military context. As being able to project power far from one's shores.

Raising the per capita GDP is something we should strive for. Where there is nobody left below the poverty line.

Military power is useless without economic power, case in point being USSR the only nation to ever match USA military might but eventually disintegrated because of never coming close to becoming an economic superpower.

When nobody is left below the poverty line then one should think of becoming an economic superpower matching USA/Japan/China/Germany/UK etc. China currently is halfway to becoming an economic superpower but still much to do, same is the case for their military strength. India is currently nowhere near but then it also doesn't need to because once even a poor small country like North Korea acquires nukes then even US has to think hundred times before taking any military action against it. Same reason why India Pak border will never change in the foreseeable future.

 

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Military power is useless without economic power, case in point being USSR the only nation to ever match USA military might but eventually disintegrated because of never coming close to becoming an economic superpower.

It just means what I said. Think of the UK in the Falklands or the imperial Japanese attacking pearl harbour. Power projection.

When nobody is left below the poverty line then one should think of becoming an economic superpower matching USA/Japan/China/Germany/UK etc. China currently is halfway to becoming an economic superpower but still much to do, same is the case for their military strength. India is currently nowhere near but then it also doesn't need to because once even a poor small country like North Korea acquires nukes then even US has to think hundred times before taking any military action against it. Same reason why India Pak border will never change in the foreseeable future.

see, what you are talking about here is avoiding the middle-income trap and becoming an advanced economy.

In 1960, south Korea was poorer than Pakistan. Until 1980 they were still poorer than North Korea. It's only after that their economy picks up.

South Korea avoided the middle-income trap

The trouble with industrialisation is it is harder and takes longer in a democracy. You only have to see land reform, labour reform farm reform and the pushback.

Nearly all countries industrialized before they became democratic. So we have to come up with our own ideas and solutions here.

 

[guest_999]

see, what you are talking about here is avoiding the middle-income trap and becoming an advanced economy.

In 1960, south Korea was poorer than Pakistan. Until 1980 they were still poorer than North Korea. It's only after that their economy picks up.

South Korea avoided the middle-income trap

The trouble with industrialisation is it is harder and takes longer in a democracy. You only have to see land reform, labour reform farm reform and the pushback.

Nearly all countries industrialized before they became democratic. So we have to come up with our own ideas and solutions here.

Only country that can be compared here is China, population of nations like South Korea is too small to take them as reference for anything as what works there will likely won't work here at a much larger population base. Most important thing to take from China is not their one party forced industrialization reforms but rather their push in education & health sector. It is common logic that a country which doesn't have good basic education system & basic healthcare will never achieve overall progress even if it acquires nukes & become a trillion dollar economy. Instead of wasting time & efforts on things like farm laws it would have better output wise to instead focus on reforming basic education & higher education system as well as basic healthcare system. Instead, govt is wasting time & effort on "curating syllabus" to remove things like evolution & periodic table.

 

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Only country that can be compared here is China, population of nations like South Korea is too small to take them as reference for anything as what works there will likely won't work here at a much larger population base.

China isn't the best model to follow. if you're looking for a larger population base there is the US

Most important thing to take from China is not their one party forced industrialization reforms but rather their push in education & health sector.

They might have achieved more in terms of education but in terms of health sector we did better than China in the pandemic. Way better. This was the only country in the world trying to help others in terms of meds and vaccines whereas everyone else was stockpiling beyond their requirement and even crimping raw materials to us.

It is common logic that a country which doesn't have good basic education system & basic healthcare will never achieve overall progress even if it acquires nukes & become a trillion dollar economy. Instead of wasting time & efforts on things like farm laws it would have better output wise to instead focus on reforming basic education & higher education system as well as basic healthcare system. Instead, govt is wasting time & effort on "curating syllabus" to remove things like evolution & periodic table.

Disagree and I'll tell you why. And please spare me the opposition rhetoric. Since forever people have made the argument you are. So clearly you don't understand.

The solution is everything else but what you said. What we need is to grow the economy consistently for the next two decades. Everything falls into place after that. Our education system produces enough people. So many that there is a surplus that goes abroad. Didn't Obama say American kids had to compete with kids from Bangalore?

Having lived in the West for many years, I can tell you that education levels there were lower. In the UK until the 90s the number of people who went to university was just 5%. Most got jobs after school and worked their way up. In the US the university education level was 20%. Because jobs were available afforded by an economy that needed people. During the pandemic, we learnt 60% of Americans live from one paycheck to the next. That is why they needed such a big fiscal stimulus. Then people made online orders and the ports got clogged. Online grew bigtime, they hired more people and now no more pandemic so Amazon has to lay off over 25,000 people because they were mostly temp hires for a crazy surge brought on by fiscal stimulus..

Education is a racket in India. In China which you mention as a reference, XJP went after the coaching business a year or so back. Shut them down. Imagine the outcry if the same happened here.

Are the laws in a state conducive to business? Labour laws what are they like? Hire and fire is the way. Reforming them proved to be too big a fight back in 2015.

Half of the GDP of this country is generated by India Un-Inc. That is everyone from the flower seller to small businesses.

How much interest to pay on a business loan? If you have to pay 8% and your competition pays 2% then there will be more business and jobs in that country than here. Simple.

The Morgan Stanley report that everyone is raving about



GDP per capita doubles from what it is today in 2032



There you go

 

[guest_999]

They might have achieved more in terms of education but in terms of health sector we did better than China in the pandemic. Way better. This was the only country in the world trying to help others in terms of meds and vaccines whereas everyone else was stockpiling beyond their requirement and even crimping raw materials to us.

One time advantage does not mean permanent advantage. Yes India did help others but not without cost(deaths here were not some insignificant number not to mention early lockdowns direct & indirect effects).

The solution is everything else but what you said. What we need is to grow the economy consistently for the next two decades. Everything falls into place after that. Our education system produces enough people. So many that there is a surplus that goes abroad. Didn't Obama say American kids had to compete with kids from Bangalore?

Growing economy is not exclusive to developing health & education sector. Education system here mostly produce "unemployable graduates" & the minority which is good immigrates abroad. It is this minority which only remains Indian in name that Obama mentioned.

Having lived in the West for many years, I can tell you that education levels there were lower. In the UK until the 90s the number of people who went to university was just 5%. Most got jobs after school and worked their way up. In the US the university education level was 20%. Because jobs were available afforded by an economy that needed people. During the pandemic, we learnt 60% of Americans live from one paycheck to the next. That is why they needed such a big fiscal stimulus. Then people made online orders and the ports got clogged. Online grew bigtime, they hired more people and now no more pandemic so Amazon has to lay off over 25,000 people because they were mostly temp hires for a crazy surge brought on by fiscal stimulus..

Basic education is till 10th/12th after which university/college system starts & that is even worse in India. The example of US just proves that GDP is not everything & there can be a country with 60% ppl living paycheck to paycheck while having the largest economy in the world & most no. of billionaires. Also, US culture is heavily credit based so living by paycheck to paycheck in many cases simply means paying credit card bills without any relaxation period.

Morgan Stanley is not saying anything revolutionary, just by virtue of inertia of economic policies & population growth India will likely become 3rd largest economy but that does not mean India will also jump ranks in per capita gdp or various HRD indexes like education, child mortality rate, basic healthcare etc.

GDP per capita doubles from what it is today in 2032

And it doubles to around $5000 by 2032 when China today stands at around $13000 & by 2023 will likely reach $25000-30000 by then.

India's economy is doing good no doubt but as it stands there is a little chance to overtake China let alone become a "developed nation" even by the end of 2050 by which time Climate change effects will come into action with full force & nothing will be for certain anymore.

 

[alekhkhanna]

I know this is OT, but today NCERT announced that they are dropping the periodic table, chapters on democracy and environmental sustainability from its books/syllabus.
India will be the next generation of pseudoscientific idiots, subdued as well as riled up by political whims. I've zero optimism for this country now that education is a clear target.
I missed - chapters on evolution have also been cut off. GG govt.

 

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One time advantage does not mean permanent advantage. Yes India did help others but not without cost(deaths here were not some insignificant number not to mention early lockdowns direct & indirect effects)

First time nobody knew what to expect, second time they relaxed more. Not so in China where we got a CCP original called 'zero covid' to go along with one child policy and the great leap forward.

.Growing economy is not exclusive to developing health & education sector. Education system here mostly produce "unemployable graduates" & the minority which is good immigrates abroad. It is this minority which only remains Indian in name that Obama mentioned.

A rising tide lifts all and the smallest the most. I'm convinced what you say about education is tried, tested and failed for long now. Who wants more of it.

Basic education is till 10th/12th after which university/college system starts & that is even worse in India. The example of US just proves that GDP is not everything & there can be a country with 60% ppl living paycheck to paycheck while having the largest economy in the world & most no. of billionaires. Also, US culture is heavily credit based so living by paycheck to paycheck in many cases simply means paying credit card bills without any relaxation period.

That 60% isn't college educated. That they can live in such a manner means they can find work. That people live mostly on credit also means the same. The savings here are much higher compared to there as there is more uncertainty.

Morgan Stanley is not saying anything revolutionary, just by virtue of inertia of economic policies & population growth India will likely become 3rd largest economy but that does not mean India will also jump ranks in per capita gdp or various HRD indexes like education, child mortality rate, basic healthcare etc.

Good economic policies that are not interfered with is important. We've been lucky with that since liberalisation.

And it doubles to around $5000 by 2032 when China today stands at around $13000 & by 2023 will likely reach $25000-30000 by then.

People think the China pre pandemic is the same as the one post-pandemic. Big mistake. Pre-pandemic China had the trust of the world. People did not mind China rising. Post-pandemic China lost that trust. There will be hurdles in the way of its growth. Fair to say China has peaked, it's all downhill for China from here on.

India's economy is doing good no doubt but as it stands there is a little chance to overtake China let alone become a "developed nation" even by the end of 2050 by which time Climate change effects will come into action with full force & nothing will be for certain anymore.

China is not a developed nation. They always say they are developing. But then they also want to rule the world. That is just the CCP for you.

And climate change is already affecting China. Show me where it has affected us. If anything it has led to year-on-year bumper harvests which is how FCI could feed 800m during the lockdown.

India is food secure. First priority since independence since we had famines before. Took fifty years to achieve it. 50% of the land is arable in India. France is 30%. US is 20% for comparison.

China is not food secure. Less than 10% of China is arable. They cannot feed themselves and have to import and lease land abroad to grow food.

Long term bet on India.

 

[alekhkhanna]

China is not a developed nation. They always say they are developing. But then they also want to rule the world. That is just the CCP for you.

That's because there are trade benefits for "developing" nations. Multiple detailed analysis on this topic on YouTube.
And fundamentally, nations like India and China are too big in population size to ever be developed. You cannot instill common sense and civic sense and harmony and rationality and fairness with such large diaspora. Even minor differences will be bigger than western nations which have a fraction of our population.

India is food secure. First priority since independence since we had famines before. Took fifty years to achieve it. 50% of the land is arable in India. France is 30%. US is 20% for comparison.

Arable Land by Country 2024

worldpopulationreview.com

Quantum of arable land is almost equal between US and India, but we have to feed multiples of population vs US.

 

[lockhrt999]

Is India a big market portrayed in media a big lie??

India's market is big and in one way it's a bad thing.

Our domestic brands can't produce comparable products that can compete in developed countries. Because they don't have to as domestic market is so big that they can dump all their crap here itself. This is not possible for small countries like Bangladesh and vietnam. So their brands have to improve the product to make them comparable to standards of developed countries.

Had our domestic market been small, you would have seen Bajaj on american roads.

If south korea had a huge market, we would have never heard of Hyundai, Samsung, LG.