Part 6: Friendly Conclusion ( final)

Sometimes it takes a small talk with a friend to trigger an event that gave me the courage to write in a blog. So thanks to my Friend. So here is the previour part 5: Lessons from US.
To those who want read from the beginning, here is Part1

It does not make difference who gets the credit as long India and Indians are benefited, of course it is politicacally imperative for sonia Gandhi to give importance to her family. Though I cannot avoid, I have to mention Media is biased and we give proper credit to people who deserve.

There are lot of problems facing India and we need a good leaders to solve them.
1) India's total debt is at 770 bn ( whole of India is 1000 Billion USD loan) somebody is going to pay this bill
2) Becoz of poor power supply and transportation, most of the business is in middle of a city . making properties very costly, Inflating the land prices and out of reach even middle class families. If you compare this with US, US has very low land inflation till 2003 for most regions outside, SFO, LA, NY and Miami City. becoz of good suburban roads.
For every million rupees spent, roads raised 335 people above the poverty line, and R&D 323. Every million rupees spent on education reduced poverty by 109 people, and on irrigation by 67 people. The lowest returns came from subsidies that are the most popular with politicians - subsidies on credit (42 people), power (27 people) and fertilisers (24 people).

3) Development of transportation can develop suburbans and reduce land prices
4) 60-70% of Indians can only be employed in low skill factory jobs. We need massive industrialisation and large factories
5) we need Capital account convertibility, India will be easily able to export its inflation becoz of its size and depth. http://business-standard.com/common/storypage_c.php?leftnm=10&autono=315201

6) Government needs to stick itself to Security, foriegn policy ,law and order, without interfering much in economics.
7) Whenever Inflation increases, it means somebody is missing their food, shelter, so RBI should stick to manage Interest rates and not worry about acccumlating foriegn currency or managing sovereign wealth
8)Whenever fiscal deficit decreases, it leads long time system stability ( no major skew by govt expenditure)
9) Technology is always welcome
10).

Notes:
- Government is always powerful. never mind what freedom you think you have.
- The total Global (world wealth at current technology) GDP is around 50Bn USD and USA is 12Bn USD. There is 300 Million People in US. that is 40,000 USD per US citizen. India has 1.1 Bn, to reach US standard of living of 40k USD, Indian economy has to grow from Current 1 Trillion to 40.4 trillion for current living population. India was 300 Billion in 1991, it took us 16 yrs to treble to 1trillion. At current growth rate it will take us atleast 45 yrs to reach 40 trillion, and in these 45 yrs, India population will be 2bn atleast. so it will take us 100 yrs to reach current US standard of life. ( note: We do not know where US will be in 100 yrs.)

So, India and Indians needs lot of luck just to survive.

Further reading

1)A tale to gladden the heart of economic liberals
2)Battling the babu raj