Making India an Upper Middle Income Economy, a High Income Economy in long term

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Hey there, apart from Indian Economy Thread, here is the thread for socio economic status of Indian Society.

The thread will be discussing the strategies that could assist not only growth but well being of citizens.
Sustainable Development that could assist ideal growths for lower middle income stage, upper middle income stage in next one-two decades and even high income group, whatever long it takes.

All statistics & projections concerning socio economics and standard of living of Indians will be posted and updated here.
@HariPrasad-1 has posted such a thread earlier which was unfortunately accidentally merged into Make in India thread.
https://defenceforumindia.com/forum/threads/make-in-india.69033/page-8#post-1174864

@ezsasa @Chinmoy @HariPrasad-1 @captscooby81 @Haldiram
 
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Will put available statistics for this year & month if possible again in evening after being home. Post & compare them every year.:)
 

HariPrasad-1

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Hi @Indx TechStyle ,

this thread seem much different than what I had Posted. This one is also good but seem to be going in different direction. My thread was not to discuss economic development but ways and means for rapid economic development. I think I will have to recreate one.
 
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Hi @Indx TechStyle ,

this thread seem much different than what I had Posted. This one is also good but seem to be going in different direction. My thread was not to discuss economic development but ways and means for rapid economic development. I think I will have to recreate one.
Not any different direction has been intended. I asked for growth, high growth equals rapid development.
For me, I usually track reports about what's going on and not suggesting ways often. So, I emphasized stats initially.
I just came up with a more diplomatic title using words Upper Middle Income & High Income Economy instead of flat "rich", just a bit more of reference.:)

India's growth rate allows it to enter Upper Middle Income group easily in one and half decade but given low fertility rate & projected decline of population threatens of Middle Income Trap and remain just a semi developed country like Russia for decades.
 

nongaddarliberal

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How do we define upper middle income? I wouldn't pay too much credence to the world bank definitions, as they count anything above 1000 USD per capita as middle income. I would say at least 10,000 USD nominal per capita can be considered upper middle income.
 
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How do we define upper middle income? I wouldn't pay too much credence to the world bank definitions, as they count anything above 1000 USD per capita as middle income. I would say at least 10,000 USD nominal per capita can be considered upper middle income.
World Bank classifies them as lower middle income & upper middle income economies further. I've put that here.

I myself will put several indicators here. Because countries vary with each other in several indicators.
For today's standards,
GDP (PPP) per capita > $10,000

HDI > 0.750
Inequality adjusted HDI > 0.550

Poverty Ratio (@$3.5/day)<10%
Infant Mortality Rate<2%
Literacy Rate>85%

These are usual attributes of most Upper Middle Income Economies and these standards may change with time. Higher in 2030-50 & so on.

World at average(GDP per capita $16,000, HDI 0.73 & literacy 85%) is itself a middle Income Economy but lagging behind India at same time in many indicators and way behind when compared with GDP per capita to other attributes ratio.
 
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Quoting the earlier string of discussion here, if can be discussed further.
India's Electronic market is very large compared to what we produce. We have a sale of over 14 Crore Mobiles every year with a turn over crossing 1 lakh crore. It is very unfortunate that inspite of such a big market, Many top companies gets their phones manufactured abroad and than transfer them india for sale. We must make policy and tell the mobile hand set manufacturers to start production of their mobile 31/03/2018 or pay 100% additional custom duty. They should be given a dead line to procure all the parts from India only or pay 200% additional duty by 31/03/2019. Failing to which will make their mobile handset very costly to salable. This will give an explosion in Indian electronic market. Look at tiny taiwan and their manufacturing of electronics goods. It is mind boggling. We can not simply be a market where the others will milk us. We must consistently mount pressure on them to get more and more push for indigenization. We must do the same for other electronics goods as well. Our philosophy should be simple. If you want our market, make in India. If you can not than quite. This is an are where we are lagging behind. If we can strengthen our Electronics market, we can take a giant stride and outclass china, Japan and Taiwan like country and can have a huge chunk of international share.
@HariPrasad-1

industrialization , globalization is good but to the extent it benefits us, we must integrate our economy with the global ecomony and at the same time we must isolate our economy from the ill effects of global economic shenanigans.
we must have a fine balance between the two
the key to it is the economic upliftment of villages since soul of india is in villages


i am not a economics expert
what i know is from what i have experienced in my travels and heard from others.

i will share a experience of mine

years ago i was a in-charge of rural electrification project in an Indian state .

i had around 250 villages under me

the village/rural people were helpful most of the time if u choose to ignore village to village rivalries , family to family rivalries and other such similar situations.

the most disappointing and appalling factor which opened my eyes was the nature of the so called educated people.

a village head men who was the head master of the school in the village and by far the most educated person there was the reason behind stalling of electrification work in that village , that village was without any electricity right from the time of independence and how much i told them that if they did not get connect to the grid they will be without electricity for the next 60 years.

the bone of contention was the head master wanted the high tension 11kv lines to pass right though the middle of the village right next to his home so that someday he could set up a welding shop without any difficulty.

when we told him that was out of question due to safety reasons and against laid down rules , he started to black mail us saying he will not allow work to start if his demands are not meet.

unfortunately the village was left out and 2 months later i resigned due to political interference etc so i dont know whether the village got connected to the grid or not.

more than often i have come across so called educated people and people in power who think themselves above others and pose hindrance to the good work of other people .


we have got to change the mind set of the people first
we must tell education is a good thing
but also tell them the most important thing is the way you utilize your education without any prejudice and with humility .
and that only then your education is worth it otherwise it is just a piece of toilet paper.

now lets get to the main topic

one must think small, start small and let your efforts do the big talking (since my emphasis is on grass root level where big finances, big markets etc are initial problems )

for that you will need
1.access to information/people who can help them
2.access to finances
3.access to human resources
4.access to markets

1.access to information : this is the main problem , people especially from rural areas don't know where to go for information about government/non governmental schemes , ideas etc .
problem is not about connectivity but rather finding the right pool of information relevant to the needs of the concerned people.
also the people face problems getting info/help from the people in charge of providing the said help .

take the example of the agricultural universities , the graduates coming out of these universities are totally disconnected from the real life problems faced in the Indian agricultural sectors.
reason being they know the theoretical aspect but lack the practical aspect and also most are insensitive to the poor people/villagers problems

a simple solution would be to implement 2 years to study the theoretical aspect in the universities itself and then the next 2 years in villages to implement their knowledge.
their time spent with the poor villagers etc will help to see the difficulties faced by the villagers in a real way and in turn help them to connect with them emotionally which will further motivate them in their professional lives later on.

2..access to finances
my experiences in rural sector tells me self help is the best help, once you can fund your projects even ten percent , it increases the confidence of the stakeholders in a big way and then once ur project gets going financial help from external institutions are easy to get but still many hurdles have to be faced main bureaucratic and mindset related.

3.access to human resources (internal/external)
believe me getting people together in a village for anything is a headache.
the solution is to involve women folk , more than often women will succeed to bring together the warring factors together.
when ever i used to run into problems during the electrification work in villages i would scout for women folks and put forward my views before them and then 99% of the times things would work out .
benefit of being a ladies man LOLzzz
on serious note no of small scale industries where women can involve themselves is mind boggling and will help to increase the family income levels manifold.

external human resource is another sad story.
Indian education mainly agricultural civil works etc is totally disconnected from the rural sector the people are more interested in government jobs or urban posting . i blame the education sector for it.
if students are made to intern in rural areas and villages they will connect and identify themselves with the problems faced by the communities and will be motivated to work for their and others upliftment.

4.access to markets(local/external)
1.railway freight system has to be revamped drastically
2.middle men category has to be sanitized about the benefits of mutual all around growth of all the sections of the the society.
3.taxation and inter state movement of goods has to be revamped
etc
4.digitization of marketing so that a startup in a rural area can market their goods anywhere in the country and in the world

eliminating poverty and becoming rich are two contradictory things

i believe in self satisfaction and self dependence and self independence in finance
village and rural people need to become self satisfied and self dependent and self independent first.
let us do this in a dharmic way

while the urban India can go with industrialization in parallel
i am proposing two engines of growth which will back up each other and provide India with a strong economic redundancy in-case of global meltdown.

the urban India - industrialization
the rural India - agriculture and small scale industries

MAKE IN INDIA can can easily be modified to MAKE AND DEVELOP IN INDIA

and lastly i am no intellectual like baki dutt, arudhathi roy etc just a ordinary citizen who wrote from his experiences so please feel to disagree with me
An another aspect what I want to discuss here is that while investing the money for development, you must know what is the priority of the area and what are the economic benefits of that investments.

I see crore of Rupees are wasted in Manarega by uselessly digging the pits in surrounding of the village unproductively. Rather, a plan should be worked out to create those assets which are absolutely necessary for the villges. They may be either creating the water retention bodies like Lakes, wells etc. Or as vinoba bhave hs suggested, each village should have its medicine gardens with basic medicine plants such as Galo, Ashwagandha, alovera, Tulsi etc . 40 or 50 species of plant must be planted to take care of diseases generally happening in that area. Villagers must be educated in general medicines for various diseases. A village specific plan should be worked out to spend Manarega money. Like Anna Hazare had done in his village, One orchid of fruits should be build to see that whole village can get fresh fruits and make some money by sale of the vegetables and fruits. If we spend that huge chunk of 50000 crore manarega money wisely, we can change the faces of villages. Cleanliness and making villages green should be made mandatory at Sarapanch level. Likewise ground water recharging must be made compulsory in big housing schemes in city.
An another area need a serious look and simplification is taxation. Laws are such complected that all differs in interpretation. If you go to court, judge will differ in interpretation. A huge tellent of genius chartered accountants and cost accountants is wasted in compliance. Compliance have become so dominant and difficult now a days that compliance itself has become a big task. Today nobody talks about tax planning and financial planning. The compliance itself has become very cumbersome that tax planning and financial planning has become almost irrilevent in small business now a days. Government must simplify the tax law to have some free time to accountant and finance executives to do financial planning. I can bet that if all finance talent is diverted in financial planning and security analysis, India can soon become a very rich country And we can control the whole share market and finance market of the world. However unfortunately, we are stuck into complex tax regime and our valuable talent is getting lost in this dirty tax laws and compliance.
Set-up a number of industries. Increase exports all over the world. That will give us the kind of growth that Germany received.
The world war 2 had destroyed entire cities & industries of germany. They had to be re-built. The Marshall Plan was introduced wherein entire cities & industries were re-built on the allied power's money. This happened because of cold war. Industries needed to be re-built and production needed to be increased for the "inevitable" war with Russia. It turned out to be a cold war though.

Anyways, war never happened. All industries remained in Germany. The production remained the same. But now the profits were going to Germany.

Of course our situation is not like Germany where we have to re build everything. We need to set up large scale industries in both public and private sector and manufacture products that can be exported all over the world. We don't even need to worry about cheap labour like germany which relies on immigrants. We have more than enough manpower in India and cheap too. Once the exports start, economy booms.
An another area of focus should be electricity savings. Which includes,
1) Power saving devices such as Power factor correction devices
2) Low electricity consumption devices such as LED lamps and inverters etc.

There are many areas where the proper device makes a big difference. An invertor A/C can reduce electricity consumption by half and LED bulb can reduce electricity consumption by 1/3 to even 1/10th. This is big gain. As modi said, government is planning to save 20000 MW electricity by applying electric bulbs. To produce 20000 MW electricity, an investment of Rs 100000 crore is required and there will be an additional cost of at least Rs 3 every KW. This will reveal the power of saving the electricity. Bloody we can save tens of thousands of crore Rs by simply using LED bulbs. Economic cost of that is even more. To produce every unit of electricity, 3000 liter of water is required. This means 3000*20000 liter of water per Hour. it is 60000000 liter of water every hour and 1440000000 liter per day. Out of which 1500 village can be provided water every day. We can reduce carbon dioxide emission by 7 lakh tons every day. This are big big gains.

By applying power factor correction devices, we can save atleast 10% electricity at home. This is equally important. and economic benefits of these are much more than the financial benefits we receive. We have a very good chance of savings 30000 MW And that is equal to generating 45000 MW (Considering transmission looses and auxiliary consumption) of electricity which will require around 250000 crore of investment and and 50000 crore rupees of fuel every year. These are big big amounts. Only taking corrective steps in electricity savings may turn us into electricity surplus state. Our fiscal deficit shall down by a very big amount. Look how much big difference can some small steps can make. This single step has a potential to transform India.
Oh, if you want to help the economy with electricity, I can't think of a better option than geothermal energy. Set-up geothermal power plants across India. You won't need any kind of fuel, uranium, water in measures of a dam, solar panels or wind. Just geothermal heat. This energy is always replenishing and can never be exhausted, no matter how much you extract it as it gets replenished every day by the sun.

There is just one time set-up cost along with maintenance. You don't need other manufactured technology like solar panels. Expensive imports like nuclear fuel which has the head ache of nuclear waste disposal. And since this energy is free, you are completely independent of the world trade powers.

Not only it is very cheap, but also clean. I have a really hard time thinking about why India is not investing as much as they should in this when countries like Iceland (which of course is a far colder country) are investing and generating electricity through this.
Where in other parts of worlds these Geothermal plants are located? Are they economically viable?
There are many but a few major players I can think of are USA, Iceland, Italy, Philippines, Mexico, Indonesia etc. These countries generate hundreds of MW of power per plant. Given India's infrastructure and current drive for clean energy, we can easily set up plants that can produce thousands of MW of energy.

And like I said, this energy is inexhaustible and clean. Given the fact that India is HOT (great amount of heat lodged in central and southern Indian land), we should have been leading in this. Hence preventing unwanted cost of procuring wind mills, solar panels, nuclear fuels, dam waters etc.
@HariPrasad-1 Read this when you have time, it will give you some insite.

http://www.eai.in/ref/ae/geo/geo.html
 
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another sector is the semiconductor industry.



The Indian semiconductor industry offers high growth potential areas as the industries which source semiconductors as inputs are themselves witnessing high demand. The end-use industries such as mobile devices, telecommunication equipment, information technology, office automation (IT & OA), industrial machinery, automobiles and several other industries have applications for computing in some form or other and thereby necessarily have growing demand for semiconductors.

for the high tech gadgets available today requires higher power than reforms designing of semiconductor part of the device. Making a gadget trendy, resizes the chip inside. To address these challenges, existing manufacturing infrastructure is required to be upgraded and new full-flashed manufacturing is required in local Indian market. The wearable & smart electronics trend at our footstep future will influence entire semiconductor industry. Global semiconductor industry will be driven largely by macroeconomic development and technological advances.



Global semiconductor industry is expected to witness a CAGR of 4.3% over the next five years and reach an estimated $394 billion in 2017. India industry can wholly cater this demand in all aspects of intelligence, Man-power, raw material and natural resources and thus has a great potential to evolve as a semiconductor manufacturing hub. The roadmap will require the country to makes necessary investments in infrastructure and education.

According to the India Electronics & Semiconductor Association, the Indian Electronic System Design and Manufacturing (ESDM) market will grow from US$ 76 billion in 2013 to US$ 400 billion by 2020. Consumption of semiconductors, in the meantime, has also steadily climbed. According to a report by NOVONOUS, the semiconductor industry is estimated to grow from US$ 10.02 billion in 2013 to US$ 52.58 billion in 2020 at a Compound Annual Growth Rate (CAGR) of 26.72 per cent.

There is a need to boost the electronic design and manufacturing in India, promote product development, nurture startups and introduce a level playing field at different points in the entire electronic ecosystem. These efforts will in turn help foster growth. All these would require rigorous efforts from various stakeholders involved in the entire ecosystem and continuous encouragement from the government is needed to pull investors to make to large investments. Also, as per Government of India the bill of Import of electronics items in India will exceed that of petroleum by 2020, this factor clearly illustrates the significance of Indian semiconductor fabrication facilities.



Setting-up a Semiconductor facility in India.
A Long Term Plan – As Foundry setup is highly Capital intensive, it must be supported with a solid long term plan and financial backing. This backing is required from the entrepreneur & the government both.

Fiscal Sustenance – In text of Indian Government as tax holiday, subsidy, zero duty, financial investment etc. will play an important role in promoting the Fab along with the semiconductor industry in India; this will put further pressure on already large Fiscal Deficit. A stubborn financial system is required to bought in picture.

Support Infrastructure – This is a very important aspect which needs to be looked at for smooth running of the Fab. A world class, sustainable infrastructure, as required by a modern Fab be provided, with swift transportation, large quantity of pure water, uninterrupted electricity, communication, pollutant free environment etc.

Government Policy – This is one of the most important factors for such a massive step to be taken. The policy (that includes all kinds of subsidies, which may be tapered down in future with due conditional clauses) taken up now must be valid and stable for at least 10 to 15 years irrespective of which party is in power.


Obstacles & Challenges.


1.Huge Investments involved
2.Semiconductor Fabrication is a volume production facility right from the starting.
3.Semiconductor Fabrication will require cheap but skilled labor.
4.Very High end world –class machinery involved.
5.Requirement of very specific raw materials.
6.Uncertain Indian market
7.Disposable of Hazardous Waste
8.Infrastructure Requirement
9.Lack of education in Indian on Advanced semiconductor manufacturing



Simmtronics Semiconductors Ltd one of the largest tablet PC manufacturer in India

The Government of India expects investment proposals in electronics manufacturing to increase two times in the two years to 2017-18, giving a push to the government's 'Make in India' initiative. Of the 54 proposals received, the Centre has approved 30 requests entailing investments of Rs 6,000 crore (US$ 900 million), while 24 are in an advanced stage.

The Government of India has allowed 100 per cent Foreign Direct Investment (FDI) under the automatic route in Electronics Systems Design & Manufacturing sector. According to the data released by the Department of Industrial Policy and Promotion (DIPP), the electronics sector attracted foreign direct investment (FDI) worth US$ 1.53 billion between April 2000 and September 2015.

Some of the notable developments in this sector are as follows:

  1. Infineon Technologies, a German semiconductor firm has partnered with National Skill Development Corporation (NSDC) to impart training to youth on semiconductor or chip technology, aimed at boosting the electronic manufacturing ecosystem in India.
  2. US-based semiconductor company Freescale which has R&D facility in India, said that it is enabling its partners to bring smart products to facilitate the government's Rs 1.13 trillion (US$ 16.95 billion) Digital India initiative.
  3. Cyient Ltd has announced that it is acquiring a majority stake in Rangsons Electronics Pvt. Ltd, a Mysuru-based electronics system design and manufacturing (ESDM) services company. Cyient has signed an agreement to acquire a 74 per cent equity stake in Rangsons Electronics in an all-cash transaction.
  4. Aricent, a US-based product engineering firm has acquired Bengaluru-based chip design services company SmartPlay for Rs 1,100 crore (US$ 170 million), making it one of the biggest acquisitions in the semiconductor space in India
  5. Altran Technologies SA, a French technology consulting firm, has agreed to acquire SiConTech, a Bengaluru-based company that designs semiconductor chips, making it the first deal in the semiconductor space wherein a foreign multinational corporation has acquired an Indian start-up.
  6. Invecas Technologies Pvt. Ltd, a startup working on outsourced chip design plans to invest US$15-20 million over the next couple of years in setting up design centers in Hyderabad and Bengaluru.
  7. IESA has signed a MoU with Singapore Semiconductor Industry Association (SSIA) to establish and develop trade and technical cooperation between the electronics and semiconductor industries of both the countries.
  8. India Electronics & Semiconductor Association (IESA), the premier trade body representing the Indian Electronic System Design and Manufacturing (ESDM) industry has announced a SPEED UP and SCALE UP of its talent development initiative. This will be implemented through the Centre of Excellence with Electronics Sector Skills Council of India (ESSCI) and a Memorandum of Understanding (MoU) with Visvesvaraya Technological University (VTU) and RV-VLSI Design Center to build the talent pipeline in the ESDM space.
  9. Gujarat is expected to have its first semiconductor wafer fabrication manufacturing facility by late 2017 in Prantij of Sabarkantha district. The facility, which will be set up by Hindustan Semiconductor Manufacturing Corporation (HSMC), will employ over 25,000 people including 4,000 direct employees. HSMC along with ST Microelectronics (France/Italy) and Silterra (Malaysia) will set up two manufacturing units each with capacity of producing 20,000 wafers per month.

Hindustan Semiconductor Manufacturing Corporation (HSMC), Devendra Verma (Left) and Infineon Technologies AG, Munich, Dr Wolfgang Ziebart (right)


Government Initiatives

The electronic system design and manufacturing (ESDM) industry will benefit from the government's “Make in India” campaign and is projected to see investment proposals worth Rs 10,000 crore (US$ 1.5 billion) over the next two years, according to the India Electronics and Semiconductor Association (IESA), an industry body.

The Government of India has taken several steps to boost domestic production of electronic items and reduce dependence on imports. Some of these steps include imposition of basic customs duty on certain items falling outside the purview of IT Agreement, exemption from SAD on inputs/components for PC manufacturing, imposition of education cess on imported electronic products for parity, etc.



Some of the major initiatives taken by the Government of India to boost the Indian semiconductor industry are as follows:
1.The government also plans to invest US$10 billion in two computer chip manufacturing facilities with a view to create an ecosystem that lays the focus on high-end innovation.
2.The Union Cabinet has reconstituted an empowered committee on setting up semiconductor wafer fabrication manufacturing facilities in the country.
3.The government has planned to launch a Rs 10,000-crore (US$ 1.5 billion) fund for domestic electronic firms with a view to provide financial assistance to firms for electronics manufacturing in India.


Israel's TowerJazz to Build Semiconductor Plants in India


lets wait and see if we can do a double Taiwan

credits:
http://www.ibef.org/industry/semiconductors.aspx
http://electronicsmaker.com/semiconductors-fabrication-in-india-obstacles-challenges
Semiconductor
Is indeed having great potential.
Labor intensive, develops skills & technology, great profits & ever increasing demand. Hence, exports.
If India can replicate Taiwanese TSMC model in long term in HSMC, producing large volumes of it can make it a kind of power having monopoly in global industry.
 

no smoking

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If India can replicate Taiwanese TSMC model in long term in HSMC, producing large volumes of it can make it a kind of power having monopoly in global industry.
I don't know if India can archive self-reliance on its semiconductor in the future which is the field Chinese failed to do so in the last 30 years.

But I do know that India can't replicate Taiwanese TSMC for sure. The success of TSMC is the combined result of American industrial and technical export policy and Chinese purchase policy.
Chinese won't allow India firm to be monopoly one of her key components supply while American won't allow a large country like India to monopoly such a key part of supply chain. Americans already learned her error in the lessons of Japanese and Chinese.
 

nongaddarliberal

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World Bank classifies them as lower middle income & upper middle income economies further. I've put that here.

I myself will put several indicators here. Because countries vary with each other in several indicators.
For today's standards,
GDP (PPP) per capita > $10,000

HDI > 0.750
Inequality adjusted HDI > 0.550

Poverty Ratio (@$3.5/day)<10%
Infant Mortality Rate<2%
Literacy Rate>85%

These are usual attributes of most Upper Middle Income Economies and these standards may change with time. Higher in 2030-50 & so on.

World at average(GDP per capita $16,000, HDI 0.73 & literacy 85%) is itself a middle Income Economy but lagging behind India at same time in many indicators and way behind when compared with GDP per capita to other attributes ratio.
Not PPP again. We are already nearing 10,000 dollar per capita income in PPP. But in nominal we are at 2000. True middle income countries the world over have nominal per capita incomes of 10,000 usd on average. Anything below this cannot be considered middle income imo. But I agree with your other indicators like HDI >.750
 

Haldiram

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India's growth rate allows it to enter Upper Middle Income group easily in one and half decade but given low fertility rate & projected decline of population threatens of Middle Income Trap and remain just a semi developed country like Russia for decades.
We're moving away from the kind of economy that needs a lot of people to sustain. When one produces high ticket items, they don't need a lot of people. In the 60's, more kids = more hands to work in low quality menial jobs = more income. In the future, less kids doing high quality jobs = higher income. Instead of having 4 kids working as a street mechanic, in the future, people will understand that they can have 1 kid working in Ashok Leyland and earning 10X.

There is no middle income trap. The current youth bulge will yield its dividends, it will create a lot of wealth. The youth tends to prepone the purchase of luxury items. They take loans for buying aspirations, leading to a sharp increase in the set up of industries catering to high quality luxury goods beyond just bare necessities. Many years later, the population will taper off but the industries will still remain, and continue exporting luxury items. A good example of this changing mindset is the failure of the Tata Nano project. The company tried to give a "low priced/sensible" product to the middle class and create a large number of manufacturing jobs but the people said that they would rather buy an expensive two-wheeler like Bullet than buying a cheap car. Suddenly every company started manufacturing higher cc bikes. We should think about exporting Jaguars to the world, instead of making Nanos for the poor. The decline in population and the need for less number of people in high quality industries suits each other.

Look at Israel's population vs income. They are selling cyber solutions to the world. Despite being a desert nation, they managed to grow strawberries, now they are selling irrigation technology to others. Less population immediately reduces your denominator for HDI calculation and improves the distribution of prosperity.
 
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Not PPP again. We are already nearing 10,000 dollar per capita income in PPP. But in nominal we are at 2000. True middle income countries the world over have nominal per capita incomes of 10,000 usd on average.
  1. Nominal GDP is affected by overall inflation & wage increment of economy as well as currency appreciation/depreciation. So, it only affects purchasing power of government overseas. For people living inside country, it has little to do with their living standards.
  2. Egypt is an exception with nominal GDP per capita same as that of India's but in PPP, its $14,000.
  3. $10,000-$30,000 (in PPP) is usual range of almost all middle income countries today. Yeah, by the time India reaches $10,000, this standard might exceed $15,000.
Although, you can't categorize every middle income economy in same way as even they have a wide gap in income levels.
Let me divide them in three groups given per capita incomes:
1. Georgia, Ukraine, Sri Lanka, Indonesia, RSA & Namibia (They aren't truly middle income economies but somewhat better than lower middle income economies, better to extent that they can't be called poor at least).

2. China, Turkey, Iran, Thailand, Mexico & Brazil (actual middle income economies).

3. Russia, Oman & Croatia. (Less than developed countries, actual "Upper" middle income economies).
India will comfortably enter in first group very soon.
 

ezsasa

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Instead of looking at our economy as one single entity, it helps if we look at it individually a clearer picture will emerge.

South India will take care of itself. Tamil Nadu is lagging in maintaining its momentum, hopefully they will pick up pace.

Western India will also take care of itself. some more effort needs to be put in Rajasthan, but international tourism will compensate for its lack of industrial growth.

North(excluding Delhi and UP) is fine except for Uttarakhand. Slow pace of growth more due to terrain than anything else.industry can come up only in the plains between Delhi and south of Haridwar, beyond are only mountains .The new char Dham Yatra circuit and new hydro electric projects should compensate them to an extent.

Kashmir in north will be a perennial cost centre, we will always be spending more on J&K than it makes.

now east India (including UP)
Here is where majority of improvement needs to happen. Good thing is that this region has been recently electrified, there is scientific evidence of correlation between electrification and human development index. Within five years we should start seeing the direction these states will go.

I have no hopes for west Bengal and I doubt Kolkata alone will be able to sustain the state for much longer.

North east : a lot of it depends on Assam acting as the hub of growth in north east. The economic progress will be slow because of the high cost of infrastructure development. But once those major roads are built and house hold electrification is complete, growth will be much higher than rest of the country.


Finally my point is that the discussion in income levels are geography specific. There needs to be some tough decisions that needs to be taken like splitting UP into three or four parts for better administrative control.

I doubt India will ever be a high income country(per capita), our population will always pull that number down. That does not mean we will not have high quality of life even with medium average incomes. Within next 15 years, we should move away from measuring individual states as economic centres to cities as economic centres. In this case local governments will become stronger, state government’s role will be similar to central govt within the state.
 

Sourav Kumar

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Instead of looking at our economy as one single entity, it helps if we look at it individually a clearer picture will emerge.

South India will take care of itself. Tamil Nadu is lagging in maintaining its momentum, hopefully they will pick up pace.

Western India will also take care of itself. some more effort needs to be put in Rajasthan, but international tourism will compensate for its lack of industrial growth.

North(excluding Delhi and UP) is fine except for Uttarakhand. Slow pace of growth more due to terrain than anything else.industry can come up only in the plains between Delhi and south of Haridwar, beyond are only mountains .The new char Dham Yatra circuit and new hydro electric projects should compensate them to an extent.

Kashmir in north will be a perennial cost centre, we will always be spending more on J&K than it makes.

now east India (including UP)
Here is where majority of improvement needs to happen. Good thing is that this region has been recently electrified, there is scientific evidence of correlation between electrification and human development index. Within five years we should start seeing the direction these states will go.

I have no hopes for west Bengal and I doubt Kolkata alone will be able to sustain the state for much longer.

North east : a lot of it depends on Assam acting as the hub of growth in north east. The economic progress will be slow because of the high cost of infrastructure development. But once those major roads are built and house hold electrification is complete, growth will be much higher than rest of the country.


Finally my point is that the discussion in income levels are geography specific. There needs to be some tough decisions that needs to be taken like splitting UP into three or four parts for better administrative control.

I doubt India will ever be a high income country(per capita), our population will always pull that number down. That does not mean we will not have high quality of life even with medium average incomes. Within next 15 years, we should move away from measuring individual states as economic centres to cities as economic centres. In this case local governments will become stronger, state government’s role will be similar to central govt within the state.
Interesting analysis.

So, "North" is fine except UP. If we take out UP, how much of North remains... point to wonder.

East seems to "cosmetically optimistic" including UP. :) . UP is considered within east..Okk. Maybe the idea is to group economically similar states in the same group, but why call it "East" then?

And of course West Bengal has no hopes and how will Kolkata alone will sustain West Bengal. Points to ponder again.

No specific comments on Bihar and Orissa as expected since those states somehow stay under the radar :)

What happens to MP and Chhattisgard? Are they clubbed in North? Or in Central India?

"South India will take care of itself"- Good to know. I am located in South India. If it takes care of itself, I am safe I guess ;)
 

ezsasa

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Interesting analysis.

So, "North" is fine except UP. If we take out UP, how much of North remains... point to wonder.

East seems to "cosmetically optimistic" including UP. :) . UP is considered within east..Okk. Maybe the idea is to group economically similar states in the same group, but why call it "East" then?

And of course West Bengal has no hopes and how will Kolkata alone will sustain West Bengal. Points to ponder again.

No specific comments on Bihar and Orissa as expected since those states somehow stay under the radar :)

What happens to MP and Chhattisgard? Are they clubbed in North? Or in Central India?

"South India will take care of itself"- Good to know. I am located in South India. If it takes care of itself, I am safe I guess ;)
I know... my dilemma was that western UP does better than rest of UP, because of Delhi and noida. UP is economically well off near to Ganga river, move farther for Ganga the economy gets weaker.
 

nongaddarliberal

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  1. Nominal GDP is affected by overall inflation & wage increment of economy as well as currency appreciation/depreciation. So, it only affects purchasing power of government overseas. For people living inside country, it has little to do with their living standards.
  2. Egypt is an exception with nominal GDP per capita same as that of India's but in PPP, its $14,000.
  3. $10,000-$30,000 (in PPP) is usual range of almost all middle income countries today. Yeah, by the time India reaches $10,000, this standard might exceed $15,000.
Although, you can't categorize every middle income economy in same way as even they have a wide gap in income levels.
Let me divide them in three groups given per capita incomes:
1. Georgia, Ukraine, Sri Lanka, Indonesia, RSA & Namibia (They aren't truly middle income economies but somewhat better than lower middle income economies, better to extent that they can't be called poor at least).

2. China, Turkey, Iran, Thailand, Mexico & Brazil (actual middle income economies).

3. Russia, Oman & Croatia. (Less than developed countries, actual "Upper" middle income economies).
India will comfortably enter in first group very soon.
Yes, and check the nominal GDP per capita of all the countries 2nd category onwards. Let's not even look at the first category as we are going to match and overtake those soon anyway.
 
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Yes, and check the nominal GDP per capita of all the countries 2nd category onwards. Let's not even look at the first category as we are going to match and overtake those soon anyway.
First, the thread is about living standards and nominal GDP won't matter there because luxuries are adjusted by cost.
Our growth rate allows us to match first category in less than 10 years or surpass in 15 years.

Matching second may take a few decades as many of them too are growing very fast that they may become developed countries or at least third category till then. For third category, its mostly consisted of countries suffering recession or declining population, makes it possible to achieve 40-50% of them.
I doubt India will ever be a high income country(per capita)
Not in this century at least.:(
Although, its not imgaineable how India may look like after 2100 before 2050.
 

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