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Still no employment growth in post reform India!

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Extremely well written article by Hindu.

It highlights the fact that GDP growth/ stock market rise has nothing to with increased employment.

http://www.thehindu.com/opinion/columns/Chandrasekhar/article2153082.ece

Reading the above article one cannot help but think whether the real loctomive for increased employment is manufacturing sector - China drew out hundreds of millions from downright poverty. In India's case, absolute number of people below poverty line continue to rise, even after liberalization.
 
It is a well-written article -- but it comes as no surprise to me. The neoliberal paradigm has been a resounding failure for ordinary people. Neither is the Chinese model one to emulate -- it's just a question of time before the overheated and bubble-driven Chinese economy comes in for a hard landing. The key points are:

1) "growth" (nominal or real) by itself cannot guarantee jobs or equity. This can be seen in India, with the growth of a financial overclass,
2) there is global overcapacity in manufacturing, and
3) there are too many people and limited global resources. The whole world cannot live like Americans -- there isn't enough to go around.

For these reasons most countries cannot "grow" their way out of poverty. This aspiration is a pipe dream. We're all in for rocky times ahead -- peak oil, peak water, deteriorating soil, and runaway climate change.
 
Couldn't agree more with you.

I have no idea about income inequality in China, but it is extremely high in India ( saw some text related to it on Wikipedia) : the top 3% of Indians earn 50% of India's Income. This dwarfs the income inequality of even the US. I think this partly explains why Indian cities are so expensive as compared to the per-capita income of the people in those cities.

The reduction of poverty in India has been a statistical one : Keep using the poverty line of 1980, and ultimately, due to hyperinflation, incomes will eventually increase nominally.

An extract from Wikipedia

Social activist Mariam Dhavale, State secretary of the All India Democratic Women’s Association (AIDWA), finds the criteria for determining BPL status puzzling and one that excludes the deserving.

If you have a pucca house, a two-wheeler, a fan… you are ineligible. The pucca house could have been in your family for generations and is not necessarily a reflection of your present situation. There was a government scheme once in which girls were given cycles to ensure they went to schools. Because the girls had a cycle they were not counted as BPL
Corruption in the system allows those ineligible to gain benefits of the BPL status. A chain of corruption exists between the Government officer to the government appointed retailer resulting in grain and fuel been diverted to the black market

The downside of population boom: http://geography.about.com/od/obtainpopulationdata/a/indiapopulation.htm

I have no idea how India will feed, clothe, house, provide drinking water such a massive population, which has no jobs to feed itself.

The above were the basic questions. Now to the other less important ones :

1) How can you keep green cover in a country where population density is so high, and planning at best is pathetic - don't expect Japan like or Korea like situations here. I went to Mumbai a month back; I couldn't stand the pollution, lack of greenery over there, and this comes from a guy who comes from not a village but a major metropolitan city - Delhi.
2) All kinds of pollution - water, air, soil.
3) The health impacts and the costs associated with the above.
 
I have no idea how India will feed, clothe, house, provide drinking water such a massive population, which has no jobs to feed itself.

Can't. With or without jobs. All of South Asia is grossly overpopulated. If the USA had the population density of India, there would be over 3,000,000,000 people in the USA. The richly endowed USA could not give so many people a bare standard of living.

I think the Neolithic revolution of 10,000 years ago was a big mistake. Perhaps we were better off as hunter-gatherers, when there were between 1,000,000 and 10,000,000 humans on the planet.
 
I often wonder the reason why population density in some countries such as US, Canada, Australia, Russia, probably majority of Africa is so less, whereas population density, in general, of most Asian countries is of the charts. After all, according to geologists, the entire world was, at one time, a contiguous landmass.

Could it be possible that the less densely populated countries, unfortunately, experienced much harsher climate and natural disasters.

India, with a comparatively larger area than most high density Asian countries and with a higher population density by even Japanese standards, outshines even China, its neighbor and most populated country in the world. I often hear from Indians - Couldn't see many people even in cities like Shanghai and Beijing.

Anyway, onto the main topic, I feel that given the level of corruption, the level of income disparities, the level of inefficiency, the lack of planning, lack of infrastructure, and the burgeoning population, it is highly possible that India will be caught in the middle income country trap. In fact it seems like a perfect candidate.

I am not saying that it won't grow; it will grow, but only until it reaches the middle income country level, and thereafter, it would become stagnant because of the above factors - reminds me so much of Brazil in 1980's. Because, with the sheer size of the population, the moment these countries try to grow the prices will bring them back to reality.

This is where South Korea and Singapore were different - impeccable planning, great infrastructure, forward thinking, and small size of population - their booming economies wouldn't have a major impact on global prices, as a result they could grow faster, with inflation rates being under control.
 
My hypothesis is that developed countries have a much lower mortality rate therefore have less children. Because let's say your kids had a 50% chance of death before they were 18. How many kids would you need to ensure that 2 survived until adulthood? 4. Now what if it was 10%? Rounded down, you'd want 2.

Poorer countries have higher population densities because a more significant number dies more quickly.

Or so I believe.
 
Could it be possible that the less densely populated countries, unfortunately, experienced much harsher climate and natural disasters.

They went through their own periods of explosive growth. For instance, the population of Britan was around 3m at the time of Queen Elizabeth I (~1600). It was ~10m in 1800, and roughly quadrupled to around 38m by 1900 (despite emigration from Britain to the colonies). Europe's population was around 60m-70m in the Middle Ages (and remember that roughly a third died due to the Black Death), and is at an unsustainable 450m today. Indeed, Europe does not live just off its own land mass: the ecological footprint of countries like Britain and Holland is probably around five times their land mass -- they need the resources of other countries to sustain their standard of living for so many people. The current global economic system (aka "neocolonialism") allows them to do so by using finance as a weapon to extract resources from other parts of the world -- and where that fails, send in the troops. More precise to say the USA does all this, but its European satellites share in the bounty (as well as provide some of the troops and pay some of the expenses for NATO).
 
I often wonder the reason why population density in some countries such as US, Canada, Australia, Russia, probably majority of Africa is so less, whereas population density, in general, of most Asian countries is of the charts. After all, according to geologists, the entire world was, at one time, a contiguous landmass.

Could it be possible that the less densely populated countries, unfortunately, experienced much harsher climate and natural disasters.

India, with a comparatively larger area than most high density Asian countries and with a higher population density by even Japanese standards, outshines even China, its neighbor and most populated country in the world. I often hear from Indians - Couldn't see many people even in cities like Shanghai and Beijing.

Anyway, onto the main topic, I feel that given the level of corruption, the level of income disparities, the level of inefficiency, the lack of planning, lack of infrastructure, and the burgeoning population, it is highly possible that India will be caught in the middle income country trap. In fact it seems like a perfect candidate.

I am not saying that it won't grow; it will grow, but only until it reaches the middle income country level, and thereafter, it would become stagnant because of the above factors - reminds me so much of Brazil in 1980's. Because, with the sheer size of the population, the moment these countries try to grow the prices will bring them back to reality.

This is where South Korea and Singapore were different - impeccable planning, great infrastructure, forward thinking, and small size of population - their booming economies wouldn't have a major impact on global prices, as a result they could grow faster, with inflation rates being under control.

Dear Rishab,
have some faith in India's story...after living in 3 different developed country, I can say that every country has its own problems and corruption history...I understand you are very fraustrated and there is valid reasons for them but hearing endless chronicles of how corrupt India is doesnt feel good...instead why dont you do something to create some example in real life of which we all can be proud of? thanks!
 
@ JoJo

I of course can't reduce the population of India! Read it : NO AMOUNT OF ECONOMIC GROWTH CAN HELP LIVE THE WAY AMERICANS DO - there are just not sufficient resources. A classic example of a developed country with high population density, but nowhere near to the standard of living of Americans/ Canadians is Japan.

Here are the basic questions that no amount of economic growth, no amount of engineering can solve:

1) How to house 1.2 billion population ( and rising, expected to hit 1.8 billion - 2 billion by 2050! - scares the hell out of me) without cutting down trees, without harming nature, and keeping forest cover at around 30% of total area - as prescribed by UN.
2) How do you provide drinking water - there is only so much fresh water in India. FYI you cannot just purify sea water, even rich countries cannot afford the high costs.
3) How do you solve problem of pollution such as water ( more fertilizers, more pesticides - more pollution), air pollution (more cars, more industries - more smoke), and land pollution ( dumping of solid wastes).
4) There will always be more countryside, more space per capita in US, even Europe in some 10 years, in comparison to India. India would look like a giant urban landmass without any green countryside. The countryside of north Indian states is pathetic - all trees have been cut down to make way for land for growing crops.
5) How do you feed such a massive population? If average Indian were to consume as much food as an average American/European, the entire food supply of the world will be insufficient. FYI the yield per acre in developed countries has already plateaued- there is only so much sunlight that the plants can receive in their growing season.
6) Can you really house an average Indian in the size of an average American house - over 1900 sqft. Nope. even Europeans can't.
7) Can an average Indian use same amount of electricity per capita without impacting the prices of world commodities? Nope.

Now to the ground reality (these are things that can change provided Indians try to live with a sense of community, rather than, currenly, self centered bastards who care nothing about others):

1) No one is interested in doing ground breaking projects requiring billions of dollars.
2) No one in India is ready to spend on R&D and develop new technologies, new medicines- our pharma companies are just copycats ( quite similar to Chinese) and just believe in making generic drugs. The R&D money is spent on how to copy the product of their counterparts, rather than on developing new products.
3) Corruption. There is a huge requirement of money in India, and whatever the government vaporizes into thin air as a result of corruption.
4) Poor planning.
5) No real concern for country. I live in Dwarka, a new township in Delhi. When I came, I was charmed by the fact that - I was out of the congestion of normal city, dirt of the city, etc etc. However, unfortunately what I feared happened- People, the so called Pround Indians, came and made everything dirty - throwing garbage on the road, no civic sense, nothing. It seems people have become immune to dirt, garbage here. I see people sleeping next to garbage, at the same time throwing garbage there - this can happen only in India.

I was amazed by the fact that a foreigner has more civic sense in terms of not throwing garbage ( for a country that is not even theirs) - I saw a person carrying an empty bottle of Pepsi and walk 500 meters just to throw it in dustbin. When I insist that someone throw garbage in the dustbin, the first response is : Who cares? It's not my property anyway! Then who'll walk so much just to throw garbage, or if you are willing to throw my garbage in the dustbin then it's fine, but I wont go that far.

My philosophy : If you are poor, it's not your fault, but if you are dirty and make everything else dirty, then you are definitely at fault.

This is a classic example of difference between culture and economy. It's the culture that influences how people live and behave in the society, not the economy.

A single person cannot change everything above, especially in a country like India. It's absurd. Futher, do not expect others to do what you yourself cannot do. So, rather than suggesting me to do something ..., I would suggest that you tell me/other what you have done . However, even then its is impossible to live like Americans unless you are suggesting that we do something like the UK did in 1800's and 1900's- colonization.

India's nature ( in particular) and cities look war torn zones, because of the huge impact of the burgeoning population. There is no water for people to drink in cities like Delhi. There is no greenery, in areas which were once rainforests. We have cleared massive rainforests for the sake of housing India's population, which added another America in just last 10 years!

My friend you have confused confused economic development with improved environment. I can assure you that there is not relationship between the two.

I am a native of J & K state, more specifically a Kashmir, and even with no economic development like rest of India, it looks more beautiful, less congested, cleaner, pollution free, slum free, beggar free.

Now when you visit Himachal Pradesh, a vibrant fast growing/booming state in comparison to J &K , you get a complete opposite picture, especially cities such as Shimla - full of garbage, massive deforestation, slums, beggars, dirt. I vistied Shimla first in 1995/1996 - it was a beautiful place. Now, it's an eyesore. I've stopped visiting that place for this reason.
 
Actually, it is flatly untrue that the world cannot attain the level of wealth currently enjoyed by Americans.

Instead of looking at GDP per head, look at the resources consumed to make each $ of GDP.
America uses less energy to make a tonne of steel than either India or China and it's hourly productivity is greater than most other industrialised countries and far greater than nearly all 3rd world ones.

If Indians used energy and water as efficiently as America there's an easy doubling of GDP to be had with absolutely no increase in resource consumption. America's education level is vastly better than that received by most Chinese or Indians, and frankly if you can't get your population educated better than Americans you should be ashamed.

America has pretty much the best labour mobility in the world, Chinese people are essentially slaves who at best can aspire to being allocated to a gentle master. Indians have racial prejudice in employment that would shame people on Alabama.

When an American owns something, he owns it, and it's usually quite hard for corrupt parts of government or vested interests to steal it from him. In India and China such theft is routine.

America is depressingly corrupt, there's not one politician in office today that if he behaved that way in (say) Britain would not be in jail, indeed in theory Britain still has the death penalty for treason and a number of both houses could arguably tried for that, since taking money from foreign governments to act of them is deeply frowned upon in most other countries.

It's still vastly less corrupt than India or China.

Americans mostly vote for the candidate who they guess will make them richer. Chinese people are possessions of the state, and Indians choose people on grounds that make Sarah Palin's support look rational. Americans are of course not always right about who will make them richer, but at least they try.

Russia is capable of feeding a large % of the planet all by itself, but is so badly run that it can't even feed itself. It consumes vast amounts of energy, water, nitrate based fertiliser, vicious pesticides etc to produce food that often rots before it gets eaten.

Europe could also feed a billion people, but subsidises inefficient product for political reasons, wasting resources on an epic scale.

Most of the above are self inflicted wounds. So crap is Chinese education that many of them, possibly even a majority, still want to remain as slaves, hence the fact that China's economic growth is mostly based on the fact that it's people are worth less per hour than almost anyone else on the planet.
But conversely, as China shows, if you country is run very very very badly, merely running it very very badly can induce huge growth.
 
All the points that you mentioned are true.

It is true that India and China are less efficient in terms of utilization of resources than America. However, they still consume much fewer aggregate resources- for instance crude oil- than US.

Even, if they were to maintain same level of efficiency as US, it is highly unsustainable.

Americans, according to UN, have the highest global carbon footprint per capita ( among major economies).

Americans consume close to 19 million barrels per day (GDP ~ $14 trillion and population ~310 million). Compare this to Germany 2.5 million barrels per day ( GDP ~ $3.3 trillion and population ~ 81 million). Germany uses much lesser oil per unit of GDP than US or much lesser oil per capita (India currently uses around 3.5 mbp with less than half the GDP of Germany). Same case for UK and other countries, as a majority of people in those countries use public transport, unlike in US.

Now if India were to use same amount of oil per capita, It would require around 80 million barrels per day ~ current global oil supply! This is just not sustainable. I doubt that India can consume so much oil without affecting crude oil prices.

Similarly, according to a UN report there is barely 600 gallons/year/capita of water available in India. The danger mark is 500. US has over 5000 gallons/year/capita. Still, the drought that US has experienced has already strained the ground water supply - many ponds, lakes , and wells have dried up. If we were to use water on the same scale as US, imagine the consequences. Oh, we just can't! because we don't have!
 
Jayati Ghosh of JNU writing at Monthly Review:

According to these data, there are nearly 30 million more young people putting themselves through more education in the hope of being able to access better jobs. The total numbers of such youth in secondary and tertiary education is at least 55 million. Soon, perhaps even within the next five years, these young people will enter the job market and expect to access employment that is at least minimally commensurate with the efforts they have put in to receive more education.

But in the previous five-year period, all forms of employment (regular and casual, paid work as well as self-employment) only increased by around 28 million. If this sluggish pace of job creation continues, there will be even larger gaps between aspiration and reality in India's labour markets. That such a combination is a recipe for enhanced social tensions and political unrest is well known and has been reinforced by recent experience across the world. If only for that reason, surely the government should sit up to take notice of its own data?
 
Another good article on unemployment in India:

http://yaleglobal.yale.edu/content/india-graduates-millions-too-few-are-fit-hire

India's touted demographic advantage seems more like demographic burden to me.

Also, this article and its findings make me question the improvement in literacy rate in India. It seems more a statistical one than an actual one.

Another survey, conducted annually by Pratham, a nongovernmental organization that aims to improve education for the poor, looked at grade-school performance at 13,000 schools across India. It found that about half of the country's fifth graders can't read at a second-grade level.

"I was not prepared at all to get a job," says Pradeep Singh, 23, who graduated last year from RKDF College of Engineering, one of the city of Bhopal's oldest engineering schools. He has been on five job interviews – none of which led to work. To make himself more attractive to potential employers, he has enrolled in a five-month-long computer programming course run by NIIT.
Mr. Singh and several other engineering graduates said they learned quickly that they needn't bother to go to some classes. "The faculty take it very casually, and the students take it very casually, like they've all agreed not to be bothered too much," Mr. Singh says. He says he routinely missed a couple of days of classes a week, and it took just three or four days of cramming from the textbook at the end of the semester to pass the exams.
Others said cheating, often in collaboration with test graders, is rampant. Deepak Sharma, 26, failed several exams when he was enrolled at a top engineering college outside of Delhi, until he finally figured out the trick: Writing his mobile number on the exam paper
 
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