INDIAN ECONOMY : THE PROBLEM OF DOING LOW VALUE JUGAAD AND THE NEED IS TO MOVE TO STELLAR



INDIAN ECONOMY

KEY ISSUE

One of the key issue faced by the Indian Economy today is Inequality of Income both as compared to other countries and within the country .

If we look at the World's Top Ten countries also in terms of Total GDP in 2015  the GDP per Capita ranges from as low as USD 1752 to USD 51638 . We can argue that India and China are exceptions because of the population but it is the population which is the reason they are high consumption countries and their GDPs are high on account of high Imports.

China's Import in 2015 is USD 2000 Billion ( almost 17 % of GDP ) nd that of India USD 475 Billion ( almost 23% of GDP)

PARTICULARS 2015 1970 2015 1970
Country GDP GDP  GDP/CAPITA   GDP/CAPITA 
 United States         18,037        1,076           51,638           23,310
 China         11,158           433             6,498                228
 Japan           4,383           215           47,150           18,435
 Germany           3,364           212           45,260           19,626
 United Kingdom           2,858           149           41,183           17,880
 France           2,419           131           41,702           20,092
 India           2,116           113             1,752                369
 Italy           1,822             90           33,889           17,654
 Brazil           1,773             88           11,212             4,674
 Canada           1,553             60           50,108           24,628


And these number are not going to change substantially in the future also when the projections are that China and India would eventually be the World's number 1 and 2 economies in terms of total GDP.

So it is the Doing Jobs where the Value Add is Low.  ,  where there are few countries like India who would produce a lot , import as export a lot , consume , construct but still would remain much below the levels of per capita income to qualify as a RICH country .Bal of Payments from 1970 to 2015.

For example

In service industry we do back office and customer resolution work for large MNCs which typically has a low pay-out and a high volume work as compared to high quality work like research , design and product development where the payout is much higher.

Do we have one IT company or IT product like Microsoft , Dell , Lenovo or Samsung or even some other brand ( forget about Apple) ??

Similarly in manufacturing we produce mass products for branded companies at a small margin who then brand it and sell it at high margins and their design and copyrights are the high margin stuff .

Can we name one international brand from India that commands premium ??

Our problem is not investing in Brands , Proprietary Technology , Research for new Products and just doing JUGAAD . 

WE NEED TO MOVE AWAY FROM JUGAAD TO STELLAR IN WHATEVER WE DO

Between 1970 to 2015 while the GDP has grown from USD 59  Billion to USD 2 Trillion which is 40 times , the population grew by more than 2.5 times as a result of which GDP per Capita which was abysmally low in 1970 at USD 115 is still at USD 1700 .


Also India has been a Net Importer because of Petroleum Products , Edible Oil and even mineals and metals thanks to some earlier restrictions because of iregularites found now corrected.

On the import side IT and ITES is the major revenue earn apart from Auto sector .

But to improve the living standard of the Indian population there is a need to grow exponentially or grow without any further growth in population .













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