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I'm not sure what it means to be a large economy anymore. If you roam around any of the cities in India, you see nothing but a third world nation, with rampant
by dr_ 15y ago
I'm not sure what it means to be a large economy anymore. If you roam around any of the cities in India, you see nothing but a third world nation, with rampant poverty and horrific infrastructure. And of course in the villages, it's even worse.
And businesses apparently have had difficulty dealing with the corruption in the Indian government.
The country has such a long way to go before it can stand on the same footing as the US or even some of the European countries whose economies it is supposedly surpassing.
- byw 15y agoUsually when they refer to the size of the economy they imply the leverage it has on the world stage because of its collective wealth. From the average individual's perspective, it's more about per capita GDP.
- AndrewDucker 15y agoLarge doesn't necessarily mean a lot for standard of living, because India's population is also very large, so the amount of economy per person is a lot smaller. India's GDP might make it 4th (by Purchasing Power Parity) or 10th (nominally), but per person it's down at 129th. (Figures via: http://en.wikipedia.org/wiki/Economy_of_India http://en.wikipedia.org/wiki/Economy_of_India and http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP%29_per_capita http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP... )
- josefresco 15y agoFrom what I read you're accurate. You could also make the argument that you could replace the word "India" with "China" and not be too far off in describing another huge economy.
- chailatte 15y agoI don't think you've been to either country.
- dr_ 15y agoThis may be true on the outskirts, but in the cities, China has made huge advances, especially with infrastructure, roads, railway, etc. Of course, this is not true for all of China.
- PakG1 15y agoTell that to all my co-workers in China where I make 3x what they make. They can barely pay for rent. I'm just lucky that as a foreigner, I had leverage to max out the pay scale (and still getting paid only Chinese-level salary). The economic divide between the rich and poor is just as huge and just a big a concern, especially with the crazy real estate prices in the cities. Common to see 7 university-graduated kids sharing a 40 square metre apartment. I have friends like that.
- Symmetry 15y agoThe bottom 5% of households in the US still earn about the same amount as the top 5% of households in China. If we were talking about the top 1% it would be totally different, but still China is overall much poorer than the US - even in the cities. EDIT: Also contrast it with Brazil, where the bottom 5% make about the same as the bottom 5% of China, while the top 5% make almost what the top 5% in the US make.
- potatolicious 15y agoIn absolute amounts sure, but that's irrelevant to spending power or quality of life. The bottom 5% of households in the US make nominally more than the top 5% of households in China, but I'm willing to be the bottom 5% in the US lives far worse than the top 5% in China.
- yzhengyu 15y agoScratch this image deep enough and you will realize top local officials in China are always under tremendous pressure to increase GDP growth to further their own position and careers and that the easiest way will be build 'anything'/'something' within their jurisdiction. If anything, go ahead and Google for China's empty cities. Frankly, I would not want to be anywhere near that bubble when it bursts. The only point of consolation is that the Chinese still have a tight control over all aspects of their society, so they might be in a better shape to recover when their banks go bust.
- wmoxam 15y agoThere are huge differences between the two. China has far, far better infrastructure for starters, and the amount of absolute poverty is far lower in China.
- thewisedude 15y agoTrue...only in the cities.
- jswinghammer 15y agoIndia has structural problems in its' economy that will inhibit its' growth going forward. Japan has been stagnating for decades now and has shown no signs that they've figured out what the problem is. They've become the most indebted industrialized nation in the world paying for stimulus after stimulus while at the same time the Keynesians are telling them they haven't done anything to stimulate the economy.
- nuncanada 15y agoOhh modern economy... It's fun when Nobel prizes go for those that insist in doing what is clearly not working... And just some weeks ago, a notorious Japanese economist says in a interview they figured out how to deal with the stagnation.... (Permanent stimulus!)... Don't they think the japanese are ever going to retire and need a large chunk of this money borrowed to the government? Without positive demographics it's impossible to keep postponing the balance sheet correction forever...
- harichinnan 15y agoWhat matters to HN readers is 10% of Indians own 52.9% of the wealth in India. http://www.livemint.com/2010/10/13203814/Distribution-of-wealth-of-nati.html http://www.livemint.com/2010/10/13203814/Distribution-of-wea... So even though the country at large is poor, 130 million people could become your potential customers, spending on par with other wealthy nations in the west.
- yummyfajitas 15y agoCrunch the numbers. According to your article, you have 130 million people with an average net worth of $18k. In terms of income, the vast majority of those people have real income lower than the bottom 5% of Americans and nominal income even lower. http://economix.blogs.nytimes.com/2011/01/31/the-haves-and-the-have-nots/ http://economix.blogs.nytimes.com/2011/01/31/the-haves-and-t...
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- kyle221 15y agoGDP and GDP/capita are two different things
- deleted 15y ago[deleted]
- ashishgandhi 15y agoI grew up in India. I can confirm whatever you said is true and is a euphemism. Few people talk about the poverty in India (it is almost similar to quite a bit of Africa) and how India was a socialist country where you required license to conduct almost any business. But even fewer people talk about how, culturally speaking, seniority has always been more important than the merits of what is being said and the fact how in practice everything - the law, police services, elections, etc. - falls under the government and aren't independent bodies. The main ruling party for most of history (called Congress) has always been run by one family alone. Nepotism?
- michaelchisari 15y agoa socialist country where you required license to conduct almost any business. How is that different from the U.S.?
- ashishgandhi 15y agoE.g.: Facebook did not have to go get approval from the government that they could run Facebook. And since there was no license involved, there was no limit, on say the number of users, etc. Pretty different from pre-liberalization India.
- michaelchisari 15y agoPeople are voting me down, but I was not making a loaded statement, I'm honestly interested in knowing the difference how it differs from state licensing agencies in the U.S. For instance, since Facebook is a Delaware corporation, here is the state of Delaware's Business Registration and Licensing: https://onestop.delaware.gov/osbrlpublic/ https://onestop.delaware.gov/osbrlpublic/
- VinyleEm 15y agoLook for License Raj in wikipedia.
- 15y ago
- americandesi333 15y agoThe problem is in the distribution of wealth. The nation is growing at 7-8% a year compared to 0-2% growth in US, but most of the wealth in India is in the hands of 5% of the population. The middle class is slowly growing, but not at the rate to close the disparity. Democracy in its core is the reason for the slow infrastructure, government and social reforms because its like moving a big elephant. China on the other hand is able to be quite nimble with communism. Its interesting. I dont advocate communism because it sounds great in theory but rarely works practically, but it is working for China.
- yummyfajitas 15y agoIndia doesn't have as much inequality as you think. Their Gini index is very middle of the road at 36% (comparable to Switzerland and Spain). http://en.wikipedia.org/wiki/List_of_countries_by_income_equality http://en.wikipedia.org/wiki/List_of_countries_by_income_equ...
- 5l 15y agoI think the word you're looking for is totalitarianism, not communism.
- ashishgandhi 15y agoChina's growth comes from following capitalistic free market policies which are not communist in nature. (http://www.google.com/search?q=capitalism+in+china http://www.google.com/search?q=capitalism+in+china) Moreover, I remember listening to one of The Economist podcasts where someone had done audited Chinese firms more strictly where they don't write off the cheap (free) land government provides, or other give aways. Turns out on a whole Chinese firms are destroyers of capital and not creators. Crudely speaking, they take land and convert it to output X. The value of X tends to be lower than the value of the land.
- utkarshsinha 15y agoGandhi, is that you?
- lootabooga 15y ago"If you roam around any of the cities in India, you see nothing but a third world nation, with rampant poverty and horrific infrastructure." Yes, I've done just that. Hollandale, Yazoo City, Holly Ridge, Bentonia, Greenwood, ..., er, India you said?
- rohitkumar 15y agoI agree. The term 'large economy,' when applied to the average person is an irrelevant term. For the average billionaire it means something, but to the average person (in our case, the average internet/mobile user) it means nothing. These old economic indicators do not measure the actual economic conditions in localities. Local economies have to be robust - that's the true sign of a progress.