Make in India

[sorcerer]

The making of a rupee: made for India but not entirely made in India

It costs a lot of money to make money.

The special papers and inks, security features, and printing processes require specialised facilities and a hefty sum every year. So it’s no surprise that a number of countries, from Denmark to Kuwait, look to outsource the printing of their currencies.

But India, the world’s second-largest producer and consumer of currency notes (after China), isn’t one of them. The country prints all of its notes. However, until recently, it used to import many of the raw materials needed to make money. For instance, it got around 95% of the watermarked paper required for currency notes from companies such as Germany’s Giesecke & Devrient and Britain’s De La Rue, among others.

India uses around 22,000 metric tons (MT) of such paper every year and that accounts for at least 40% of the total cost of manufacturing money. For the year ended June 2016, the Reserve Bank of India (RBI) supplied 21.2 billion banknotes and printing costs came to around Rs3,421 crore ($502 million).

That high cost is likely one of the reasons prime minister Narendra Modi was keen to include India’s currency in his “Make in India” project, putting an end to outsourcing. In 2015, he urged RBI to start producing more of the required paper and ink, with the eventual goal of keeping the entire production process within the country.


This week, Indians are gradually getting their hands on the new Rs500 and Rs2,000 notes produced at RBI’s press in Mysuru, Karnataka. What’s interesting is that part of the paper used to make them was produced in India, though RBI refused to reveal exactly how much.


This paves the way for India to eventually become self-sufficient in producing all its currency notes, an important milestone that comes nearly 90 years after the country first began printing its own paper money.

From England to Nasik
When the British colonial government first issued rupee notes in India in 1862, it sourced them from the UK-based Thomas De La Rue which started out printing playing cards and postage stamps before entering the currency business. Today, the nearly 200-year-old company, now known as De La Rue, is the world’s largest commercial bank note printer and also supplies much of the paper used to make them.

In the 1920s, the British decided to print money in India. In 1926, they began constructing the region’s first-ever currency printing press in Nasik, Maharashtra. The city was picked for its stable climate and close proximity to a key railway line that connected it to the rest of India, according to Rezwan Razack, co-author of The Revised Standard Reference Guide to Indian Paper Money.

Two years later, the Nasik press began operations, printing a Rs5 note of the same design previously brought from England. Over the next few years, this press would go on to produce new designs of notes in denominations of Rs100, Rs1,000, and even Rs10,000, which could be used all over India.

Long after the British left in 1947, the Nasik facility was still India’s only bank note printing press. But as the economy developed, the demand for money increased and a larger production capacity was required. In 1975 the government established the country’s second press, this time in Dewas, Madhya Pradesh, which produced more hi-tech notes with better security features to prevent counterfeiting.

By 1997, these two presses together were printing all the notes India required. However, with a growing population and more economic activity, demand was again outpacing their combined capacity. So, the government decided to place a massive printing order of 3.6 billion notes with American, Canadian, and European companies (including De La Rue) to fix the shortfall. That was an expensive move, costing around $95 million and attracting heavy criticism amid concerns over potential security risks.

After this episode, the government established two more such presses, one in Mysuru in 1999 and one in Salboni, West Bengal, in 2000.

Through it all, India’s sole facility to produce the paper needed for new notes was the Security Paper Mill in Hoshangabad, MP. It was established in 1968 as a step towards bringing India closer to its goal of becoming self-sufficient in producing its currency. But with its capacity of around 2,800 MT, it could only meet a small part of India’s paper requirement; the rest had to be sourced from countries such as Britain, Japan, and Germany.

It has taken nearly 50 years for further change.

Following Modi’s urging, the government and RBI’s printing and paper production subsidiaries stepped up their capacity in 2015. A new production line was added to the Hoshangabad mill and operations finally began at a second mill in Mysuru, close to the printing press. This new mill was built with a capacity of 12,000 MT and, together with the Hoshangabad line, was expected to meet pretty much all of India’s bank note paper requirements, while also knocking off around Rs1,500 crore from its future import bill.

While it’s not immediately certain whether the new rupee notes officially mark the beginning of a completely “Made in India” phase, they do mark a big move in the evolution of printing money in India.
http://qz.com/844672/along-with-nar...played-classic-signs-that-foreshadow-fascism/

 

[Indx TechStyle]

India - A Country in an Optimistic Mood – Deutsche Welle

India is not only this year's official partner at the Hannover Messe. German businesses are also closely watching Asia's third biggest economy. German companies, especially plant and machinery manufacturers, have long had a presence in India.

Now they anticipate higher sales, are building modern factories and and doubling their work force. That's partly because Indian Prime Minister Narendra Modi has been easing conditions for foreign companies in India. He also wants to increase foreign direct investment. And the country's potential is far from exhausted.

India - A Country in an Optimistic Mood - A German Point of View

 

[India22]

@Indx TechStyle do you believe we can have cashless economy when internet is poor in India?

Do you think we should go for Bullet Train when rail infrastructure is not so developed in India?

Do you think India should invest more on agriculture than industry?

 

[Indx TechStyle]

@Indx TechStyle do you believe we can have cashless economy when internet is poor in India?

Not cashless but "less cash" economy is must because India already is one of world's largest cash driven transaction economy.
For internet, active internet users are nearing 50% of population and internet speed ramped up highly with 4G India has quadrupled minimum broadband speed when India is laying kilometers of broadband everyday.
Like other developing countries, India got 2G, 3G and 4G much later than developed countries but with recent ramp up, India will get 5G with all other biggies.
India is further setting semiconductor plants to produce electronics locally and cutting down the costs. Moreover, with digital transactions, India can't only save billions but it can also add 0.5% to 1% to our growth rate given increased consumption.
Documentation of parallel economy will show increased GDP as well.

Do you think we should go for Bullet Train when rail infrastructure is not so developed in India?

For other countries of our class, our rail network is not only okay but very massive.

Over that, we have dozens of metro systems, building a dozen decade on decade and now even started monorails and metrino systems.
Surely, this isn't enough and there's a need of speed to further strengthen to match more developed countries.
Our system has quantity and we need quality. i.e. bullet train.

Do you think India should invest more on agriculture than industry?

Am I that stupid. Entire agriculture must mechanized to sustain production and people must be pushed towards industries.

We are a poor country because we export raw material from agriculture etc. and import prepared material.
Industry bears high income as well.

Thank God (though I don't believe in God) it's changing and we are having manufacturing growth at 2 years high.

India has already overtaken USA as world's 3rd largest steel producer and soon will overtake Japan to be second after China.
Japanese production declined, China grew by just 0.7% but India's steel production was up by 12.3%.


In long term (one or two decade), we will catch up with China as well because Chinese middle class is saturated and China is an upper middle income economy.

On the other hand, India being a lower middle income economy with unsaturated middle class. Our consumption driven economy won't stop because our middle class is expanding.

Exports depend on international market and India's exports uncertain, they go up and down (this year up but last year down). So, being a consumption driven economy will help India to sustain growth unlike countries like China and Bangladesh who underwent export oriented industrialization.

 

[India22]

@Indx TechStyle While I do agree that in India internet network is spreading rapidly. but still network's power remain problematic. Internet's high speed is not consistent. Transaction of money online is very sensitive and needs to be done swiftly. But still cheque payment we have as option. May be Banks should start giving bigger cheque books to encourage people to use cheques.

On rail, I can say, although our railway infrastructure is massive but still is not so sophisticated. We have still lots of guardless level crossings and many areas where Double line is not present yet. Plus trains dont really follow time table that way. May be first we can start using more electrically powered engines.

About agriculture I can point out that our food security is declining. Lots of cultivable lands we have lost because of population increase. When people still die of starvation in India, I think agriculture should be emphasized upon more. India still is well below in reducing malnutrition. Indian agricultural products should be capable of completely satisfying domestic demand and export.

 

[Indx TechStyle]

While I do agree that in India internet network is spreading rapidly. but still network's power remain problematic. Internet's high speed is not consistent. Transaction of money online is very sensitive and needs to be done swiftly. But still cheque payment we have as option. May be Banks should start giving bigger cheque books to encourage people to use cheques.

Still, no argument to strike digitization.
With a single problem, why break entire string of gains?

On rail, I can say, although our railway infrastructure is massive but still is not so sophisticated. We have still lots of guardless level crossings and many areas where Double line is not present yet. Plus trains dont really follow time table that way. May be first we can start using more electrically powered engines.

Already been ramped up. Railway needs advancements and higher speeds, i.e quality.
So, HSR (you call bullet train) is vital for such a highly populated countries.

About agriculture I can point out that our food security is declining. Lots of cultivable lands we have lost because of population increase. When people still die of starvation in India, I think agriculture should be emphasized upon more. India still is well below in reducing malnutrition. Indian agricultural products should be capable of completely satisfying domestic demand and export.

As per GHI 2015 report, India's 15% population was malnourished (compared to 47% in past) and starvation ratio more insignificant.
I didn't pitched for making agriculture to decline but for mechanizing it. Labor in agriculture must be minimized.

 

[India22]

That I can agree with that labour in agriculture should be reduced. We have also lots of closed factories which need to be opened. Similarly we have to reduce population growth by a mandatory 2 child policy.

We can also force Indian industrialists only to invest in India and make the land acquisition easier for industry, though not on fertile soil.

 

[Indx TechStyle]

India’s urbanization is like a revolution: McKinsey’s Jonathan Woetzel
Jonathan Woetzel of McKinsey Global Institute says the pace of Indian urbanization is 3,000 times the impact of the UK industrial revolution.

Jonathan Woetzel said the key to building smart cities is to create trust among stakeholders, which, in turn, leads to investments in infrastructure. Photo: Indranil Bhoumik/ Mint

Kolkata: Urbanisation is an irreversible process and a necessary condition for economic growth, says Jonathan Woetzel of McKinsey Global Institute (MGI), a research arm of the global consulting firm.

A senior partner and director at MGI, Woetzel, based in Shanghai, advises Asian businesses on global growth. He is also an expert on urbanisation and has led numerous research initiatives into related subjects such as affordable housing.

He was in Kolkata recently to meet lawmakers, government officials and business leaders.

In an hour-long chat on urbanisation, Woetzel said the key to building smart cities is to create trust among stakeholders, which, in turn, leads to investments in infrastructure.

Edited excerpts:
From the standpoint of resource allocation by governments, how important is urbanisation?

Urbanisation is a necessity. There are no rich countries which are not urbanised. There are, indeed, some urban countries which are not rich, or urbanised areas which are not rich, but being urbanised is a necessary condition to become a prosperous society. And urbanisation is like flipping a switch: it doesn’t stop, it doesn’t go back, it just goes on year after year.

What we can say is urbanisation today is happening at a pace and a scale which is effectively 3,000 times the impact of the UK industrial revolution. So how did we arrive at that headline number? When the UK experienced industrial revolution, it took about 150 years to double income and to move people from farm to factory. And then, as time went by and urbanisation happened about 100 years later in North America, Europe and in Germany, it took 50 years to double income.

For India, as it urbanises, it is taking about 10-15 years to double income. And, of course, we are not talking about 10 million people but we are talking about a billion people. That means we are moving 10 times faster with 300 times as many people. So, 3,000 times the impact. This is a revolution—an asteroid hitting the planet.

So what are the key challenges to urbanisation?

A city is a productivity engine: a place for high density, high frequency interactions. That’s keeping a lot of people together, and you force them to interact with each other. That’s what a city does. And higher the density, higher the frequency of transactions, more rapidly the engine turns over and more productive the city becomes. Social challenges (in achieving this) automatically come down to the question of access to life in a city, access to employment, access to education, access to public goods, access to entertainment, and all in a manner which is sustainable.

In practical terms, it comes down to various challenges, the first one being finding affordable housing within an hour-and-a-half’s commute for everybody to their work. We know this for a fact that people who commute to work for more than two-and-a-half hours have poor lives: they are more likely to be alcoholic, more likely to be divorced, their children are more likely to go to jail, and they will lead shorter lives. It can’t be a good thing to spend 20% of your day sitting by yourself or standing in a bus.

People do not actually want to commute but they have to. So the second big challenge is to figure out a way how to get people access within their communities, within their neighbourhoods, to the things they need. Why are jobs so far away from where people live? Why are the hospitals so concentrated in one part of the city? Why are the primary schools not available in their neighbourhood and are not good enough to go to? So that’s the second big challenge. Public transport, of course, is a huge component of that because if you are spending three hours of your day standing on an unsafe, unreliable public transit, your life is not very good.

And the third thing, which may be more controversial, is the inclusion of migrants. For most cities, growth is going to come not through population, but from migration. You need to think about migration in a different manner in the light of the fact that the native population no longer is producing children. We know that migrants, for example, are the leading source of entrepreneurship. In Silicon Valley, for instance, 40-50% of companies are headed by people who came from other countries. This is true globally.

And some cities are favourably disposed towards migration, saying migrants are to be invested in, and they are assets which will ultimately yield return. So if you treat migrants as cost, they will behave as costs. But if you treat them as assets, they could invest in schools, hospitals, pensions and this inclusion will then lead to cities becoming more productive. It may not happen in the first year, but let’s say in 4-6 years, you can get to see that. Migration typically has a negative fiscal impact in the first year or two, but then starts to turn around.

And, of course, it depends on the type of people migrating: whether they are all working age population, which is, generally speaking, a very good thing, or do they have lots of kids and lots of old people in which case it is a bigger challenge. Of course, if you have only working age population, typically they send more money away and they often leave. So having the capability to integrate migrants makes a difference. So three things—housing, transport and migrant integration—I see these as three main challenges on the social side.

But because of people moving in, the character of cities is changing...

The average life of a building now varies between 20 and 60 years depending on where you are. And in fast urbanising societies, it is closer to 20 than 60. So, in the European-built cities, it is more like 60s, in the American ones, more like 40s, but in Chinese cities, it is more like 20s.

China doesn’t lease out land for more than 20 years to industry, and residential spaces go out for 50-70 years. And they are very comfortable with that: they will knock it down and build again. It’s a very plastic society and I would say that is the big characteristic of an urban environment. So they are, first, intensely unromantic; there is no attachment to the past. It is the recognition of the value. The Chinese overnight created the urban middle class by giving all workers of state enterprises the rights to their dwellings at a nominal price. Overnight 100 million Chinese people became property owners. That created the urban middle class.

What is the key to building smart infrastructure?

Infrastructure we know is an enabler; its returns are typically measured in terms of a multiplier. As we talk about private sector investors, they do not operate usually on the time frame of 100 years. It is a constraint. The challenge is to balance the long term capital requirements of city building with a short term return mentality of the private sector. Where is the long term private sector capital that should be invested in pension funds? This is where the market is not working, so long term infrastructure finance is not coming to the table.

The economic challenge (for urbanisation) is to recognize that we are all in it together, and that the success of a city in creating wealth is a collective success. Ultimately, success should be measured by the ability to increase demand for your products and services. Funds come from value creation; if there is no value creation, if people are not becoming more productive, there is not going to be any more funding.

So who brings in the resources?

Local challenges (to infrastructure building) have to be solved by local communities. So it is all about trust, and trust creates savings and savings create investments. No trust, no saving, no investment. Trust is a political question actually. That’s why we see great cities built by great leaders who can create that social trust.

But pollution is a niggling concern: how do you deal with it?

If your purpose is to simply avoid pollution, why do you build a city in the first place? Being a green city isn’t the point. The point is to be a great city, which is also green. Every economic and social decision one takes has an environmental consequence and vice versa. Every time you decide to invest in a park, you will have an economic and social impact. Environment is part of your equation; it is not something separate.

It is always easier to prevent than to remediate, much rather fix things before they happen. The good news for India and China is all these environmental problems are coming at much earlier stage of economic development than it did elsewhere and they are coming after other countries have identified what those answers might be. Air pollution, for instance, is coming at a low rate GDP per capita in India than it is in US.

You may have noticed that air pollution was getting bad in the 1970s and 1980s when the US GDP per capita was $10,000-12,000 or thereabouts. At that point, they made massive investments in cleaning up and that investment was far larger. In India, it is much earlier in the process that this problem has been identified. I think all these problems are addressable. Economists would say India’s advantage is its backwardness.

 

[Indx TechStyle]

From IIED, UNFPA:

May be above world average but this urbanization growth rate isn't satisfying either. Thankfully, estimates from July found the rate significantly higher and about 60% of Indian Population was expected to live in cities against previous 50% estimate in this report. Hoping that figures further goes up.

 

[Indx TechStyle]

How Indians earn

How India spends

 

[Indx TechStyle]

Professionals outnumber promoters in million-dollar club

• HIGHLIGHTS:

Indian professionals have outnumbered promoters in financial year 2015-16 in the million-dollar salary club

• The elite club has 61 professional CEOs, compared with 58 promoters
• Kalanithi Maran and Kavery Kalanithi are India’s highest-paid CEOs/CXOs for the fourth consecutive year

MUMBAI: India Inc's million-dollar salary club just got beefier with professionals outnumbering promoters in financial year 2015-16. The compensation study of executives commissioned by TOI to global executive search firm EMA Partners reveals that in 2015-16, 61 professional CEOs took home a pay package of Rs 6.5 crore or roughly a million dollars, compared with 58 promoters who form part of this elite club.

This is the first time professional CXOs have outnumbered promoter CXOs, reflecting the coming of age of Indian enterprises where pay-for-performance defines the work culture and professionals get rewarded handsomely for the impact they create.

In the previous year's survey (2014-15), out of 100 executives who made it to the million-dollar salary list, 52 were promoters and 48 were professionals. In the year preceding that, the gap between promoters and professionals was wider — 58 promoters against only 36 professionals. In 2009, out of a total of 49 in the million-dollar club, only nine were professionals.

K Sudarshan, managing partner, EMA Partners India, said: "We believe this trend is set to continue and we will see more professional CEOs join the ranks of India's highest paid executives. This is also a reflection of the scale of Indian businesses, which are now truly global."

Sudarshan said this was "just the tip of the iceberg" as a number of highly paid professionals, who are part of unlisted entities serving Indian and multinational companies across sectors like financial services, private equity and large business conglomerates, don't feature in this list.

"Further, if we are to consider the value of stock options then we will probably see another 125-150 people added to this list," he said.

Keeping up with tradition, the Marans (Kalanithi Maran and Kavery Kalanithi) continue to keep the top two slots in the list of India's highest-paid CEOs/CXOs for the fourth consecutive year.

Among those who saw 100% or more increase in compensation from the previous year are A M Naik of Larsen & Toubro, K Venkataramanan (now retired from L&T), Vishal Sikka of Infosys and Ameet Desai, executive director and Group CFO at Adani Enterprises, and Vijay Aggarwal, MD of Prism Cement. Only two women are part of the million-dollar club — Kavery Kalanithi Maran (Sun TV) and Renu Sud Karnad, MD, HDFC.

Said Karnad: "It is a positive trend that we are seeing of more professional executives in the 'million-dollar club'. This emphasises their growing demand in organisations as business complexities and importance of talent at top level increases. Professional executives' vast industry experience and independent and unbiased views, and the increasing global reach of business makes them an ideal choice to work along with promoters and in the best interests of stakeholders. This also highlights an important fact that promoters are giving more importance to talent at top level. This is in line with the trend in developed countries of having professional executives at the helm of the organisation."

Indian compensation at the top is reaching a point where the numbers are quite comparable to what one sees in the West. "As Indian family owned businesses build scale and complexity, their reliance on professionals is only increasing all the time as many of them are now board managed and professionally run with exemplary governance standards comparable to the best in the world," said Sudarshan.

The study reveals an overall positive trend in the remuneration package of senior executives in the country, with over 75% taking home increased compensation and only four taking a cut of over 20% compared with last year. It ranks executives as per their compensation package including bonus (excluding stock options/shares) in the top 200 companies for the financial year 2014-15. It has based its million dollar cutoff at Rs 65 per US dollar, which comes to a salary of Rs 6.5 crore per annum. For comparison purposes, the previous year's salaries have also been mapped at the same exchange rate.

Most promoter chiefs earn from dividends from their companies and equity appreciation rather than remuneration. During 2015-16, Mukesh Ambani, with compensation at Rs 15 crore, was ranked 43rd as per the EMA Partners' study. Anand Mahindra, with about Rs 7 crore compensation, was ranked 117th, while Adi Godrej (about Rs 19 crore compensation) was at no. 34 and Kumar Mangalam Birla (Rs 43 crore) at no. 11.

Compared with last year, there has not been much change in sectorwise comparison. Industrial/manufacturing which comprises steel, chemicals and construction continues to pay high compensation to the executives and have the largest pie. However, in 2016, some professionals have either retired or resigned, which means the needle could tilt back towards promoters unless more professionals break into the million-dollar salary bracket.

 

[Kshatriya87]

Apple is in talks to start manufacturing in India, says report

Apple has outlined manufacturing plans in India, according to a report, and also asked for financial incentives.

Apple is in talks with India’s government to explore making products locally, the Wall Street Journal reported on Tuesday, as the US firm aims to make deeper inroads in the world’s second-largest mobile phone market by users. The report quotes senior government officials with knowledge of the matter.

According to the Wall Street Journal report, one of the senior officials said, “Apple wants to emulate its China model in India,” and is seeking financial incentives. It adds that the government is looking into the proposals. The report does not mention which products Apple is looking into manufacturing in India.

The Journal said Apple, in a letter to the federal government in November, outlined manufacturing plans and asked for financial incentives.

Interestingly if one goes according to the latest reports, Apple is also considering about manufacturing in US. A recent report said Apple asked Foxconn to prepare a plan on how cost effective it would be to move manufacturing to the US. President-elect Donald Trump had promised his voters in the election that he would get Apple to build their computers in the US. Apple has not yet commented on any of these reports.

In India too, Prime Minister Narendra Modi is trying to boost technology manufacturing in the country through his ‘Make in India’ initiative. His government in June exempted foreign retailers for three years from a requirement to locally source 30 percent of goods sold in their stores.

Government representatives were not available to comment, while an Apple spokesman in India did not immediately respond to an email from Reuters seeking comment.

Local manufacturing would help Apple open retail stores in the country where its iPhones account for less than 2 percent of Indian smartphones sales. Taiwan’s Hon Hai Precision Industry Co Ltd (Foxconn), which makes Apple devices such as iPhones and iPads, has a manufacturing facility in southern India, but Apple’s products are wholly manufactured in China.

Currently, Apple does not have a wholly-owned store in India and sells its products through distributors such as Redington and Ingram Micro. The Cupertino-giant manufactures in six countries including Korea, Japan and the US. In May, the Finance Ministry had rejected relaxing the 30 per cent domestic sourcing norms. Apple sought for relaxation as a pre-condition for bringing in FDI to set up single-brand retail stores in the country.

 

[Indx TechStyle]

Cross Posting
by The Diplomat

A view of the interior of the newly-constructed Lemon Tree Premier hotel, located outside the Indira Gandhi International Airport in New Delhi April 2, 2013. The cluster of hotels built here is known as Aerocity.
Image Credit: REUTERS/Adnan Abidi
Life In Aerocity: Finding India’s Place in the New Strategic Context
“India will be a leading author in the next chapter of world politics.”

Over the past three years, through periodic observations, I have measured the rise of New Delhi Aerocity, the commercial complex adjacent to Indira Gandhi International Airport. Unlike the unruly and burgeoning outskirts of this megacity – the teeming slums, clogged arteries, impromptu shrines and haphazard construction – Aerocity is sterile and organized, and, hopefully, a secure compound of paned-glass modernity. Like its cousins, Gurgaon’s DLF Cyber City and Noida’s Jaypee Sports City, Aerocity is a planned urban-development with a specific commercial design, in this case an international business hub intended to enhance the airport’s economic engine beyond aeronautical activities, a common characteristic of our futuristic global age.

Aerocity construction Credit: Roncevert Ganan Almond
In the shadow of the future, history always awaits in India. At Aerocity, the nearby Delhi Metro connects you to the city center, and within half an hour you can wander through Old Delhi to Kashmiri Gate, locus of the siege of Delhi, a key battle during the Mutiny of 1857. Sometimes known as India’s First War of Independence, an event credited by Karl Marx as a national revolt, the Mutiny ushered in a new age in the history of the subcontinent and the world: the establishment of the British Raj and direct colonial rule, the beginning of an end. The Congress party – of Gokhale, Tilak, Gandhi and Nehru – would be founded a generation later. The seeds of change were planted in the reddened soil of Delhi.
With the inauguration of U.S. President Donald Trump, a revolt of sorts, a new era appears in the making once again. As Arun Kumar Singh, the former Indian ambassador to the U.S., notes, the Trump presidency remains undefined; and it is unclear, in my view, whether President Trump will sustain America’s global leadership. In its report on global trends, prepared every four years for the incoming president, the U.S. National Intelligence Council (NIC) describes an international landscape in flux, as the post-Cold War, unipolar moment has passed and the rules-based international order is being subject to revision. Without a doubt, India will be a leading author in the next chapter of world politics and the Asia-Pacific will be the manuscript upon which it is written.

The new café at Aerocity, therefore, seemed like the appropriate place to consider the NIC’s findings and India’s place in the new strategic context.

Victim of Success

The period of the greatest globalization in the world economy – from 1989 to 2008 – fueled a historic rise in living standards for almost a billion people. As described by the NIC, the biggest “winners” included members of the new middle class in emerging economies, with India being an exemplary example. [Among the “losers” were lower-to-middle-income households of advanced economies, a political reality confirmed by the 2016 U.S. presidential election.]

Beginning in the 1990s, India enacted liberalizing economic reforms fueling historic growth rates that crested in 2010. The scale and speed of the growth was exceptional: India doubled its per capita income in 17 years; the United Kingdom took 154 years to perform the same feat. As a result, many of the world’s households who graduated from subsistence – living in “extreme poverty” (below $2 a day) – reside in India. And with increased wealth comes increased hope.

Among the global trends identified by the NIC is a growing distrust of governments and elites due to a widening gap between government performance and public expectations. In this vein, the rise of Narendra Modi, with his Gujurat-model, may be interpreted as a response to India’s economic downturn in 2011 and the perceived incapability of the Congress-led coalition government. In turn, the test for the prime minister is satisfying the increasing middle class sensibilities of his electorate while addressing India’s profound structural and societal challenges.

Fortunately for South Block, the NIC predicts that India will be the world’s fastest growing economy during the next five years as China’s economy slows. At the same time, India is facing escalating demands for education and employment that accompany its rising, youthful population. According to the NIC report, India will need to create as many as 10 million jobs each year in the coming decades to meet new demand in the workforce. In the meantime, disruptive technologies like artificial intelligence and increased automation could eliminate jobs and place India in a middle-income trap. Insufficient opportunity may lead to radicalization of the country’s bulging youth.

For example, in search of meaning and identity, disaffected youth could turn to religious and ethnic identity, which in India, despite its worthy efforts at promoting tolerance, could mean sharpened communal divisions. Recent protests in Chennai, the country’s fourth largest metropolitan area, asserting Tamil culture may be evidence of this phenomena. Moreover, India is projected to surpass Indonesia as having the world’s largest Muslim population in 2050. In the words of the NIC:

“The perceived threat of terrorism and the idea that Hindus are losing their identity in their homeland have contributed to the growing support for Hindutva, sometimes with violent manifestations and terrorism. India’s largest political party, the Bharatiya Janata Party, increasingly is leading the government to incorporate Hindutva into policy, sparking increased tension in the current sizable Muslim minority as well as with Muslim-majority Pakistan and Bangladesh.”

Added to this dynamic is the problem of widespread prenatal sex selection. The NIC projects that within 20 years, large parts of India will have 10 to 20 percent more men than women. Such societal imbalances – which take decades to mitigate – have been linked to abnormal levels of crime and human rights violations such as rape, human trafficking and sexual exploitation. Even if anecdotal, newspaper headlines of sexual violence, on any given day in Delhi, is a black and white reminder of this problem.

In sum, the NIC warns that India could become a “victim of its own success” as the country’s growing prosperity leads to a “paradox of progress” where effective governance runs into the complications of the youth bulge, rapid urbanization, inadequate infrastructure, poor public health, severe environmental degradation, and exclusionary identity politics. Nowhere is this dynamic more evident than in India’s megacities.

Megacity Mania

By 2035, the NIC forecasts that more than three-fifths of the world’s population will live in urban areas, an approximate 7-percentage point increase from 2016. This means that an overwhelming majority of the world’s projected population of 8.8 billion (a 20 percent increase from today) will reside in cities. By this time India will have become the world’s most populous country with 1.5 billion people, almost half of whom (42.1 percent) will be urban dwellers; the subcontinent may have three of the world’s 10 biggest cities and 10 of its top 50.

The challenge of megacities (measured at 10 million or more) is enormous. Again from the NIC report:

“Although megacities often contribute to national economic growth, they also spawn sharp contrasts between rich and poor and facilitate the forging of new identities, ideologies, and movements. South Asia’s cities are home to the largest slums in the world, and growing awareness of the economic inequality they exemplify could lead to social unrest. As migrants from poorer regions move to areas with more opportunities, competition for education, employment, housing, or resources may stoke existing ethnic hatred, as has been the case in parts of India.”

As Katherine Boo so memorably recorded, slums like Annawadi, adjacent to Mumbai’s Chhatrapati Shivaji International Airport, are scenes of intense human drama and immense tragedy. Slums can also overwhelm the capacity of local governments. From Google Earth you can see how Mumbai’s slums have altered the symmetry of the airport layout, with one arm of Terminal 2 stunted to account for the protruding tent city. These slums present a unique security threat, providing potential access for terrorists seeking to capitalize on the high-visibility and strategic value of Mumbai’s airport.

And with rising urbanization comes increased pollution. The NIC reports that South Asia already has 15 of the world’s 25 most polluted cities, and more than 20 cities in India alone have air quality worse than Beijing’s. By 2035, air pollution is projected to be the top cause of environmentally related deaths worldwide. The incredible levels of Delhi’s air pollution already alter the daily lives and life spans of its citizens.

Traffic on Delhi’s beltways – a snarling slow-moving parade of two-wheelers, three-wheelers, and four-wheelers (in addition to the occasional horse-drawn cart) – leaves one bleary-eyed and sniffling. Many days the air quality index (AQI) is “hazardous,” meaning that conditions causing “serious aggravation of heart or lung disease and premature mortality in persons with cardiopulmonary disease and the elderly” and “serious risk of respiratory effects in general population.” In order to curb pollution, the Supreme Court has intervened to enforce an odd-even system wherein daily vehicle-use is segregated based on license plate numbers.

These new urban centers also serve as hotbeds for religious movements. For example, the NIC categorizes India’s Hindutva, or Hindu nationalism, as a “predominantly urban phenomenon.” In support, the report cites Shiv Sena – the most radical Hindutva political party – which has governed Mumbai for several decades. The future could see growing support for sectarian elements and the potential for violence in efforts to enforce cultural homogeneity in the community. For India, which still has fresh scars from Partition, this is not an idle threat. To borrow from Shiv Visvanathan, the “silences of Partition” could give rise to new and unpredictable voices. In measuring norms of democracy and tolerance, the NIC cautions that the world will look to see how India “tames its Hindu nationalist impulses.” Given India’s civilizational influence, the most attentive audience will be its neighbors.

Limited War, Unlimited Consequences

Since its founding modern India has struggled with securing its periphery – the frontier arch extending from the headwaters and tributaries of the Indus River to those of the Brahmaputra. In turn, India’s national security policy has focused on the immediate threat from Pakistan, volatility in Nepal, Bangladesh, and Sri Lanka, and a lurking China peering over the Himalayas.

The NIC counsels that Pakistan, unable to match India’s economic prowess, will seek other methods to maintain even a “semblance of balance.” The risk of conflict with Pakistan must be understood within a greater trend toward interstate conflict due to diverging interests among major powers, ongoing terrorist threats, continued instability in weak states, and the spread of lethal and disruptive technologies. According to the NIC report:

“Future conflicts will increasingly emphasize the disruption of critical infrastructure, societal cohesion, and basic government functions in order to secure psychological and geopolitical advantages, rather than the defeat of enemy forces on the battlefield through traditional military means.”

Weaker parties may resort to asymmetric warfare and surrogate attacks, a form of limited war, but with the potential for unlimited consequences in the case of nuclear-armed India and Pakistan.

Indeed, New Delhi has struggled with finding the balance between “confrontation” and “engagement” with Islamabad, to paraphrase Srinath Raghavan in his keen contribution to Shaper Nations. In 2016 we witnessed a re-occurrence of this dynamic in Kashmir. India accused Pakistan of supporting incursions over the Line of Control (LOC), including by Lashkar-e-Tayyiba, a designated terrorist organization. In turn, New Delhi allegedly engaged in “surgical strikes” against Pakistani forces in Kashmir. Most recently, Modi signaled the terms for future engagement: “Pakistan must walk away from terror if it wants to walk towards dialogue with India.” The subcontinent’s security dilemma, however, may not allow for such tightrope finesse.

The blurring of war and peace in South Asia may lead to potentially catastrophic violence. The NIC report predicts that Pakistan will seek to develop a credible nuclear deterrent by expanding its nuclear arsenal and delivery means, including short-range, “battlefield” nuclear weapons and a sea-based option, which lower the threshold for nuclear use. In one of its future mock scenarios, the NIC forecasts a “mushroom cloud in a desert in South Asia” – a nuclear exchange between Delhi and Islamabad – the first nuclear conflict since 1945.

In a more positive frame, the NIC tributes India with being the region’s “greatest hope” to drive regional trade and development. As part of a broader effort to assert its role as the predominant regional power, the NIC predicts that New Delhi will expand its orbit by offering neighboring countries – Nepal, Bangladesh, Sri Lanka, and Burma – a stake in India’s economic growth through development assistance and increased connectivity to India’s economy. In Afghanistan, New Delhi has sought to foster a direct and productive relationship, having spent more than $2 billion on economic cooperation.

For China relations, the picture is complex. India must carry the burden of having an irredentist great power on its northern border. New Delhi is still recovering from shock of the 1962 war. Despite Indian objections, China is continuing to build the China-Pakistan Economic Corridor (CPEC), which passes through Pakistan-controlled Kashmir. According to the NIC, China’s actions and indifference for India’s interests are driving New Delhi’s to balance and hedge. The strain in the bilateral relationship is further aggravated by Beijing’s position in world governing bodies.

Seat at the Table

Unsurprisingly India is seeking an expanded role in international institutions to match its increasing presence on the world stage. For example, New Delhi would like a permanent seat on the United Nations Security Council (UNSC) and membership in the Nuclear Suppliers Group (NSG), a club of countries that contributes to non-proliferation by controlling access to nuclear technology. This is consistent with the NIC’s finding that states, in an attempt to gain new privileges, will seek to adjust the hierarchy in existing institutions.

New Delhi is growing increasingly frustrated with Beijing’s blocking of India’s seat at the table of global governance. However, necessary reform of international institutions to reflect a new distribution of power is unlikely given conflicting interests among member states. The NIC foresees the exercise of veto power by key players:

“Competing interests among major and aspiring powers will limit formal international action in managing disputes, while divergent interests among states in general will prevent major reforms of the UN Security Council’s membership. Many agree on the need to reform the UN Security Council, but prospects for consensus on membership reform are dim.”

During this struggle, international norms and institutions may stagnate and decay. Joseph Nye warns that the U.S. may turn inward with a corresponding loss in global public goods. The global community may lose what my graduate professor Bob Keohane described as gains in cooperation, efficiency and interdependence from regimes developed over the course of the last century. A devolvement to regional bodies, spheres of influence, and improvised crisis-management will create new costs and uncertainty.

One result of this 21st century disorder will be the strengthening of U.S.-India relations. The NIC characterizes India as “an increasingly important factor in the region as geopolitical forces begin to reshape its importance to Asia” and predicts that the United States and India “will grow closer than ever in their history.” Some of the foreign policy landmarks of former U.S. President Barack Obama’s legacy reflect this convergence: his announcement of U.S. support for India’s permanent UNSC seat; the decoupling of Pakistan from the U.S.-India relationship; and the U.S. backing of Delhi’s inclusion in the NSG despite earlier conflict related to nuclear proliferation. Indeed, India and the United States, as the world’s two largest democracies, will be key architects for building a future based on liberal values related to civil, political, and human rights.

A State of Motion

India faces significant challenges in moving forward to achieve its full potential. As the NIC observes, the country sits at the vanguard of global trends related to world trade, urbanization, environmental impact, terrorism, inter-state conflict, religious identity, and international governance. India must be prepared to shape its destiny, not be a passive participant in its “tryst with destiny.” The future of world politics requires an active and assertive India.

Much like with the geopolitical landscape, construction continues here in Aerocity. Laborers, migrants from dry villages of the Gangetic plane and abandoned Himalayan hill stations, new megacity residents, enter each day to realize the promise of 21st century India. Swaying cranes, swinging shovels, rumbling bulldozers, Aerocity is in constant motion, kicking dust into the air, another layer in the fog above Delhi. When the jackhammer pauses, I put down the NIC report and look upward, in search of the sky.

 

[Indx TechStyle]

Work in progress: India improves in Corruption Perception Index

 

[Indx TechStyle]

GDP 2017
Nominal: $2.46 trillions
PPP: $9.59 trillions
Per capita
Nominal: $1852
PPP: $7224
Again pretty good growth, per capita too has been saved by controlled population growth rate.
But even better could be done. Did anyone gap between GDPs in PPP and nominal is enlarging? Means there's some inflationary potential left to boost nominal GDP.

If anyone noticed,

Indian GDP 2011,
₹83.88 Lakh crores ($1.8 trillions)
GDP 2016
₹156 lakh crores ($2.3 trillions)

Way faster than China did in 80s & 90s, India has actually been doubling economy in every 5 years.
If currency deappreciation & deficit wasn't there, Indian Nominal GDP growth rate would have been recorded in double digits today!

 

[ezsasa]

GDP 2017
Nominal: $2.46 trillions
PPP: $9.59 trillions
Per capita
Nominal: $1852
PPP: $7224
Again pretty good growth, per capita too has been saved by controlled population growth rate.
But even better could be done. Did anyone gap between GDPs in PPP and nominal is enlarging? Means there's some inflationary potential left to boost nominal GDP.

If anyone noticed,

Indian GDP 2011,
₹83.88 Lakh crores ($1.8 trillions)
GDP 2016
₹156 lakh crores ($2.3 trillions)

Way faster than China did in 80s & 90s, India has actually been doubling economy in every 5 years.
If currency deappreciation & deficit wasn't there, Indian Nominal GDP growth rate would have been recorded in double digits today!

2.46 this is the highest estimate I have seen so far..
Which source is this?

 

[Indx TechStyle]

One more thing to add,

Budget in 2016: $570 billions
Budget in 2017: $700 billions
http://www.imf.org/external/pubs/ft...NGDP,NGDPD,GGR,GGR_NGDP,GGX,GGX_NGDP&grp=0&a=
Really massive!

 

[Indx TechStyle]

2.46 this is the highest estimate I have seen so far..
Which source is this?

Latest, IMF numbers!
http://www.imf.org/external/pubs/ft...1&c=534&s=NGDPD,NGDPDPC,PPPGDP,PPPPC&grp=0&a=

Earlier, IMF projected India to be $2.6 trillions, but we reached $2.46 trillions,
On the other hand,
India has outperformed PwC estimates for $2.1 trillions!

So, as I told before, on this thread,
http://defenceforumindia.com/forum/...conomy-by-2050-pwc-report.78422/#post-1266116

IMF gives most optimistic & PwC gives most pessimistic estimates of Indian Economy,
We underperform in ending against IMF estimate but always outshine PwC projections!

 

[Indx TechStyle]

Something related.
Copyright Global Economic Symposium
Escaping the Middle Income Trap
The Challenge


The middle-income trap is the situation in which a country’s growth slows after reaching middle income levels. The transition to high-income levels then seemingly becomes unattainable. According to World Bank estimates, only 13 of 101 middle-income economies in 1960 had become high-income economies by 2008. This is an increasingly relevant phenomenon. The share of world population living in middle-income countries has risen dramatically over the last decades resulting from the rapid growth in Asian economies – particularly China and India. Empirical work suggests that the growth rate of per capita GDP typically slows substantially at incomes of between US$10,000 and US$15,000.

Growth slowdowns can often be attributed to the disappearance of factors that generate high growth during an initial phase of rapid development.



Growth slowdowns coincide with the point where the pool of transferrable unskilled labor is exhausted so that productivity growth due to shifting additional workers to industry from agriculture and from technology catch-up is diminishing. International competitiveness is eroded and output and growth slow. The first stage of growth from low to middle income is input driven based on abundant labor supply and high rates of investment. Sustained growth toward the high-income level must be increasingly characterized by a relative abundance of human capital and availability of technological and managerial resources. Middle-income countries are squeezed between the low-wage poor-country competitors that dominate in mature industries and the rich-country innovators that dominate in industries undergoing rapid technological change.

What are the conditions that allow a dynamic transformation of comparative advantage to avoid the middle-income trap? How to move from resource-driven growth to growth based on high productivity and innovation? Can building a high-quality education system be sufficient without more responsive and modern institutions to support competition and innovation? What can we learn from the experience of Asian economies that successfully managed the transition, such as Korea, Taiwan, Hong Kong or Singapore? What is the role of social capital (both amongst the population of a country and between population and government) in the transition process from middle to high income? Research suggests that ethnic heterogeneity and income inequality can cause a lack of social capital. Is strengthening democracy in the political system necessary to avoid the middle-income trap? As sustained high growth in today’s middle-income countries implies a massive increase in the ranks of the relatively wealthy, is there a fundamental multidimensional “adding up” problem in which what was possible for a “few” will not be possible for the “many”?

 

[Indx TechStyle]

Cross Posting
Surat, Jaipur to be new metros by 2018 with Rs 800 billion household income

Ladies celebrate Shak in Surat. Surat is earmarked to become a metro soon.

MUMBAI: India will see the rise of two new metros – Jaipur and Surat – by 2018, with a household income of over Rs 800 billion by 2018, according to an EY report titled ‘India’s growth paradigm: How markets beyond metros have transformed’.

These cities are projected to record real GDP growth of 8.7% and 10.3% respectively from 2015-20, relative to metros’ 8.3%. As a result, both cities will cross the Rs 800 billion threshold within one to two years, with total consumption levels to reach 75%-80% of metros like Pune and Ahmedabad.

The report also identifies 42 new-wave markets, which are expected to grow at 8.9% as compared to the 8 metros that are expected to grow at 8.3% CAGR in the 2015-20 period.

Ashish Pherwani, Media and Entertainment Advisory Leader, EY India said, “Non-metro growth is out-stripping that of metros in India. There are clear cases of unmet demand in India’s top 50 cities in certain sectors. This provides a huge opportunity for various sectors to both widen and deepen marketing strategies, and effectively tap into one of the world’s largest earning populations.”

The report also notes the rise of 8 new half metros, with household income exceeding Rs 400 billion by 2020. It also highlights 13 new-wave cities that represent a high-growth opportunity, but are largely untapped, according to the report. These include Patna, Raipur, Warangal, Gwalior, Dehradun, Allahabad, Rajkot, Vishakhapatnam, Jodhpur, Vijaywada, Ranchi, Kota and Jabalpur.

Additionally, the top 23 untapped markets, as identified by the report, are all new-wave cities. These 23 markets represent 19% of metros’ household income-but only 12% of retail outlets 15% of telecom centres and 17% of malls, notes the report.

It further considers the potential of individual markets across each sector – FMCG, Retail,fashion and durables, Auto, Telecom and DTH, E-Commerce, Education, BFSI, and Real Estate.

Regarding the current top 8 Metro Cities, we've already discussed & calaculted GDP and given their current growth rate, well above India's national average, major Indian Metropolitans will be close to middle income economies,
https://qz.com/755971/by-2030-five-...ies-as-big-as-middle-incomes-countries-today/

Let's take example of Mumbai & New Delhi whose GDP (PPP) per capita's are in order of $15,000-$17,000s toady being equal to lower middle income economies.
Though, they have been growing in double digits, let's assume that their growth rate will be same as that of India which is for multiplying Indian Economy by 5-6 times and GDP (nominal) per capita by 4-5 times.
So, similar growth assumption for these cities (which is actually higher) projects a per capita income between $50,000 - $75,000 close to modern developed countries at that time.

Looks pretty good, we can have our own cities in league of developed countries.
I've more hopes with Navi Mumbai and the new tech city to release pressure from Bengaluru planned by Karnataka government.

One thing to note here, cities don't trap in middle income trap like Nations. Because they are supplied with labour from around immediately at low cost which ensures growth of megacity.