This post is intended as a discussion post, inspired by a recent Tehelka article posted on our news tab, entitled, A Lifeline of Red Tape?. The thesis of the article is this: while India’s stock market may be in free fall (it’s already lost 50% of its value from a year ago), the economic fundamentals of the country remain somewhat solid. The crisis in the global economy may not be devastating across the board, because India’s domestic economy is sheltered from world markets:
For economies such as India, the domestic growth is real and reasonably steady. But the impact of the recession in the US and the global credit freeze has meant that stockmarkets are in turmoil as foreign institutional investors (FIIs) sell equity in domestic stocks to meet liquidity needs back home; companies which had raised funds abroad now see the money supply dry up; and lack of liquidity impinges on Indian banks’ ability to lend. Wharton business professor Mike Useem says this is the world’s worst financial crisis. “Unlike the US, the world will not see an immediate impact on the surface, but the pain will be felt slowly,†Useem told TEHELKA (link)
Unfortunately, after that, the Tehelka article doesn’t really add much more meat to the thesis (though it’s still worth reading). But I think it’s an interesting point to discuss, and it’s one that my friend Rajeev, a software guy who lives in Bangalore, also suggested to me recently when he was visiting: India’s slow path to liberalization/privatization and relatively conservative rules for foreign investors will protect it from the worst of the current global financial crisis.
(Note: that is NOT the same as saying we need a return to 1970s socialism. Rather, the thesis is simply that caution in reforming and “modernizing” the Indian economy seems much more attractive at times like these.)
Obviously, the foreign institutional investors who had been propping up the Indian stock market in particular will be pulling back (they already have, as I understand it). And the IT industry, which is so heavily oriented to the global economy, is going to be feeling pain.
But while those are parts of the Indian economic boom we have been hearing the most about here in the U.S., they actually remain relatively small parts of the broader Indian economy, which is still based, first and foremost, in agriculture. The fact that most Indians owe relatively little (many Indians still prefer to pay for their homes in cash, and do not heavily rely on credit cards) also helps them weather the storm. But is that enough to keep the Indian economy moving forward?
I am less clear on what is happening with the Indian real estate bubble; I have read some things that suggest the market is on the verge of collapse, but anecdotally, friends and family in Delhi and Bombay tell me prices are still quite high. Do readers have any data on this? Also, what impact is the devaluation of the Rupee likely to have?
They have many other articles that have discussed similar issues.
One of them is banks in China, and India have not failed, the way we are seeing in West right now, and they think regulations have buffered them from this crisis.
Kush, any articles in particular you would recommend, which were especially informative?
There are two aspects to this issue. On one side, the lack of sophisticated financial products being pervasive is helping India (ICICI which is usually at the edge of Indian finance) is probably the only Indian bank of note to have been directly affected. Projections are still of 6-7% growth instead of a recession or an Iceland.
But then issues such as freezing up of credit markets have been hounding India too. So you would want there to be some sound macro economic policy. Last few weeks the RBI had been doing a forward looking job of managing the repurcussions of the crisis. But then this Friday’s report leaves a lot to be desired. Thus India still needs to a good job at its macroeconomic policy and it could very well not screw that up.
Amardeep – Ajay Shah’s blog would be a good place to check regularly for updates.
Some………
In India, Global Crisis Is Not All Bad News
Global crisis will have no impact on Indian banks
Sorry,
Let me try again.
Global crisis and Indian banks
In India, Global Crisis Is Not All Bad News
http://www.domain-b.com/brand_dossier/mkt_rsrch/20081013_nielsen.html: Indian consumers prefer saving for a secure tomorrow than spend for a comfortable today. Indian consumers are relatively conservative when it comes to wealth creation. Many place greater emphasis on securing their savings than making their money grow. As a result, Indian investors seek out low risk financial solutions despite the moderate returns offered.
This doesn’t factor in rural debt, which is HUGE. Millions of farmers are in debt currently, which is part of what is leading to an unprecedented epidemic of farmer suicides across the country. I don’t know if most of the debt is owed to banks vs. moneylenders, but either way it can be a hopeless situation. The Indian Gov’t should bail the farmers out the way America is bailing out Wall Street.
fwiw, a good chunk of the “credit” for this comes from –
.
For every 1-2 yr window when credit might seem like a demon, there are 10-20-30 yr windows when it’s a savior. As India has grown, its exposure to global contagion is increasing.
This is a digression, but in the last budget, the Govt did come out with a Rs 60,000 crore debt relief scheme (a big chunk of the GDP in % terms). Of course, its not really helped farmers because it was poorly degined and did not take into consideration important ground realities. Also, a big chunk of credit that farmers obtain is through money lender types.
8 · Amitabh said
Amitabh, the Indian Government announced a Rs. 60,000 Crore ( Rs. 600 Billion $15 Billion nominal, $75 Billion PPP) farmer debt relief program back in February, with the 2009 Budget.
What’s interesting about the scheme is that farmers who owe money to moneylenders will have their debts purchased by nationalized banks, and then the nationalized banks will further have those debts taken off their balance sheets over time by the Government. This could put a lot of money in the hands of moneylenders (“non-institutional creditors”), depending on how the debt is valued.
But to the main point of Amardeep’s post – large chunks of the Indian financial sector are government owned already, and the Rupee is not yet convertible in the capital account. These two things will slow the effect of any ‘contagion’ – which will, however, travel to India through the balance sheets of US-based investment banks with operations in India. Still, effects will be much milder than here – I hope, and expect.
Also, initially there may be some boost to some kinds of outsourcing, but I believe Malhotra in the Washington Post article that Kush linked in – who argues for technology replacing person-to-person interaction in consumer loans – has it exactly wrong. The idea that someone – or worse, a computer at the other end of the line in India would – or should – be approving a car or home loan for someone in, say, Kansas, is exactly the wrong one for the times, the times that I see coming. Due diligence on consumer and especially housing loans, will become more essential than ever, and may well face stronger regulatory mandates. Face-to-face interaction could become fashionable again, especially if mortgage bundling (for securitization) began to require stronger quality tags, for example.
Longer term, the cost-benefit analysis accompanying the logic for outsourcing in US companies could change – if tax or other regulatory changes are made. This could slow India’s economic growth a little, if and when it happens. But to the extent that India’s growth relies on its own internal markets, the overall impact will be small. But, immigration flows, especially from India to the US, could reduce or even, hard as it is to imagine now, reverse. During the Depression, immigration flows, then mostly from Europe, which had already been restricted in the 1920s, did in fact become negative. People went back to their home countries – and there were also mass deportations, especially to Mexico. While I hope to heaven there isn’t another Depression, a deep recession can cause significant reverse migration. This happened in the early 1990s in the India-US case.
Also, in the Greenspan years 1987-2006, immigration levels overall, and skilled immigration levels in particular, were strongly influenced by his view that immigration keeps wages for skilled labor and professionals in check, and this is a good thing. It may no longer be seen as a good thing going forward, and this may change the balance in the “is immigration liberal or illiberal in its effects” debate. As was also argued here on SM, he said to have thought that immigration could help revive demand for housing. The logic accompanying these kinds of statements may be looked at differently, as new things unfold in the politico-economy.
I can’t see how conscientious, thinking people can give legitimacy to the Indian economic model that is based on discrimination. The Baniya mentality of ‘hoarding’ and upper caste lending sharks has caused thousand of dalit farmers to commit suicide.
Note: Please don’t feed the trolls – especially the granola chomping sanctimonious ones. 🙂
I can believe the risk aversion will help India weather the storm. It is a commonly held view out here in Canada that the fuddy-duddy mindset saved our collective arse when Paul Martin held out to the push by WTO to dismantle some of the trade barriers.
Anecdotal evidence suggests that the effects are being felt in india. I’ve heard reports of massive layoffs as well as hiring freezes at some of the BPO’s. most recently Pepsi reported laid off a quarter of its india work force (anecdotal.. please verify somebody).
On a separate note, i’d like to get folks’ opinion on whether the four demands as listed below have converged in india or not – which would determine whether the carnage in the services sector would snoball into other sectors (or not) amd if so – then by how much. Food for thought.
i’d heard abotu this from friends and relatives but this blog corroborates… AI – 15000, Jet – 2000, Pepsi – 3300.
Let me see if I get this right. India didn’t lose money because the government did not allow Indians to make money in the first place. And this is being touted as a success of government regulation. Wow.
Khoofia, AI, Jet and Pepsi ups and downs do not affect much of India directly. The Railways and Kala Khatta will do nicely , thank you :-). What will save India is the fact that the sabzi wallahs and doodh wallahs will keep on chugging along – because of the slow down in chain supermarket expansions – if that was at all a factor until now. If clothes become expensive millions of tailors will step in. Housing – supply will always be less than supply simply because of the population crush. Commercial real estate will suffer because of over building but homegrown industries will move in – toys, toileteries, ayurvedic meds,pin, needles, pens, small electronics (you gotta see how big the business of rewiring small burnt out transformers in India still is) . It will grime the place up for sure, but who cares?
What will be affected will be the confidence of the upwardly mobile, that part of the Indian pop. that believed they were part of the global economy but again, these people will take a deep breath and go back to their cash days – no one in India really needs to rent a car on a whim 🙂
chachaji said: This could put a lot of money in the hands of moneylenders (“non-institutional creditors”), depending on how the debt is valued.
Are these lenders regulated in any way? Can any one become a bank(moneylender) or is it a hereditary thing?
The shocked “Maestro†foreseess changes coming, interesting he does not lay the blame on Freedie and Fannie but instead;
NYT.
chachaji;
while we’ve had the part-nationalisation /$799bn bank bailout under the GOP {w/Dem. support of course}, it’s interesting to see some mavericks are still speaking in quaint 19th century terms about a communist nightmare state under the opposition etc. Why let facts ruin good speechifying
neale. you are hitting upon the new new paradigm which was described very well in this article here. It is seven pages of weighed writing in small print and will nto insult the author by producing sound bites. it is a canada-centric view but he describes in some detail that the old balance-sheet view of investment and value is giving way to ecological economics. he also talks about bhutan [to keep the southasian element in the mix]. while i do not necessarily agree with you that smallscale industry in india the way you describe it is a good thing – [power theft, acid poured down the drains, abuse of migrant labor] – with a little nurturing, it will pay dividend; but global administration has to get away from the balancesheet.
sorry for an even more haphazard post than normal. work is life and life is a ball ergo work is for not squares. thus i am cool.
12 · kayastha_girl said
What liberal rock did you crawl under from…lack of first hand knowledge on your part translates into unresearched, idiotic, quickly googled western mindset comments. Please go back to your silly little world.
Risk aversion among its people is one thing, but arguing that the nation’s bureaucracy being a boon is nonsensical. What is the opportunity cost of all that red-tape. Sure, India’s economy hasn’t hit this particular pothole as hard as the US has, but rickshaw pullers are always less likely to do so than car drivers.
Big business such as real estate in India are usually extremely highly leveraged and run on credit. I think a constriction in the credit markets is affecting these businesses because they are unable to deliver on current commitments. So, at least in the first pass, the collapse of the bubble manifests itself not in falling real estate prices, but in failing businesses (or businesses that don’t make payroll etc.)
India’s greater ties to the U.S-led part of global capitalism were a huge mistake. It’s been tied to the global market for decades (see articles on poor people selling their savings in the form of gold during the depression) and cotninues to be. The part of the economy that have propsered most in its post independence years have been the huge mulitnationals it created (the big business houses), and it hasn’t focused enough on productivity growth or enough distribution to keep political stability going for the current order, so it’s going to collapse (politically). Economically, it’s a bit unclear, but the short answer is – you can’t look at GDP growth figures to understand what’s happening in India and expect those nmbers to decline; even if they do, still don’t look at those numbers to understand the big picture. As you mentioned, most of ht eeconomy is agricultural and additionally, 80% of it is in the agricultural sector (by employment).
Hello Mao. Hello BJP fascist reaction?
11 · chachaji said
What I wrote from when the debt programme was announced:
19 · DesiInNJ said
<
blockquote>
Why don’t you respond to the point kayastha_girl raised in #12 that you quoted before you dismiss it with name calling attacks. Many people with firsthand knowledge would agree with part or all of what she has said about the effects of caste or the propensity for hoarding, even if they add nuance to it or object to portions. Even boys like you have “silly little world[s]” where they think they can just write people off without responding to the substance of what they say when it’s a perfectly legitimate issue to raise. That, in fact, is the silly little world that got the entire real world into the mess that it’s in.
Amitabh,
Indian govt is bailing out the farmers, they have already released INR 25,000 crore in the farm loan waiver amount. I believe what is working in India’s favor is excessive domestic regulation. Most banks in India are heavily regulated by RBI which in some way is working in their favor. Also Indian banks and insurance companies were not allowed to make investments in derivatives like their American counterparts did hence the burn is less. I have friends who are in construction in India, Amardeep I think the real estate market is not crashing mometarily because a lot of financing may be done outside the traditional banking system. The friends I speak to talk about just holding their investment for a longer time horizon than drastically reducing prices.
Also, the labor laws in India are dated, I believe companies with more than 100 employees need government permission to fire employees. Also Jet had to hire back most if not all of the people they had laid off.
Dr AmNonymouse, I do not think the casteist hate mongering drivel merits an answer. Or alternatively, if I replaced Bania with Sudra or some other insulting moniker, would your reaction still be the same? Typical libtard Obamabot. Its only racism and bigotry as long as one particular class of people are targeted. If not, then it is only “frank discussion”. I am one of those “Brahmin-Baniya” dudes, and I am sick and tired of this F***ing BS. I was not priveleged,nor did I oppress any one,I worked hard and came up the right way, like anyone else. I dont owe anyone a single damn thing. Kayastha_girl can go and pound sand.
27 · DesiDude said
Excellent analysis, but you forgot to add sexist to your set of fair and balanced appellations.
and Kaystha girl sounds a lot like prema/vyasa etc. etc.
Dirt poor people in India are not affected, but that does not make it a good thing being dirt poor in the first place. Dirt poor people of India have always reaped the fruits of the Hindu Rate of Growth never keeping up with the ever increasing family. Middle class how ever will feel the pinch, but with this argument a large part of the Indian population would have been better off being rural farmers at the mercy of the weather god instead of urban middle class depending on Mammon. I’m not convinced!
kinda weird point of view. Large parts of indian population has little access to credit, most live in substandard housing (more like mud huts really) and spend large parts of their income on food and clothing.
So, yes, they wont be much affected – but its nothing to be proud of. I guess you could say that the govt does make sure that the absolute bare necessities are affordable, and, yes thats a good thing.
O H M Y G O D ! ! !
This post trumps Marie Antoinittes “Let them eat cake”, well done SIR!
This country will never get rid of the Nehruvian delusion…
Well, the economic fundamentals of those protected from the money meltdown, is that they didn’t have any money in the first place and thus where protected from the many good years before. And those poor guys in the IT industry would obviously have been far better of in a government job paying them basically NOTHING in the first place. I remember this argument from the Asian crisis in 1997 when the Indian intellectuals where O H S O happy not being affected by the down turn. but when the dust had settled we where still CONSIDERABLY poorer than those countries affected by the Asian crisis. I guess we will walk down that road again smiling about some chinese guy defaulting on his down payments of his new car, will taking pride in the starving children on the streets.
24 · Dr Amonymous said
You can collect all the wealth in India, redistribute it equally, and in 10 years the situation will be the same as today. There are reasons why some people have money and others don’t, and it has nothing to do with banias or brahmins or dalits or any such crap in India today. It is called Capitalism, so if you have the balls then go get your piece of the pie, or keep playing the victim for ever and ever hoping for a handout.
What’s wrong with hoarding? If you have no social security, no guarantee that your kids are going to have enough income to support you, and no health insurance, no government agricultural subsidies to stabilize your income in the long run, and no access to financial services to invest and grow your money hoarding it under your mattress seems like a pretty sound financial decision.
Am I supposed to empty my wallet to everyone who accosts me for money on the street? A country doesn’t develop economically when everyone is trying their damndest to beggar their neighbors. You actually have to bake a big enough pie before you can start talking about distributing it evenly. When everyone fights over who gets the bigger slice they’re missing out on the fact that they could ALL get bigger slices if they would just stop angling to put one over on those [insert eeeeeeeevil members of those castes I don’t belong to here.]
I’m a pretty liberal Democrat myself. I’ve been volunteering for Obama just about every weekend since the Pennsylvania primary. So I don’t really buy the other extreme where we all decide to tell the poor to sod off while we go do another line of coke off a hooker’s ass. But there needs to be a balance between growing the pie and splitting it and Indian economic policy leans waaaaaaaaay too heavily towards splitting it up.
I would be really curious as to how the real estate bubble is doing. Even if it is on the verge of collapse the prices will stay high right up until the precipitous drop. That’s why they are called “bubbles.” It’s because they tend to go pop! If they deflated gently we would call them “balloons.”
But overvalued speculative investment is usually what causes fast-growing economies to shut down. High-end real estate is probably one of the most prone to this sort of speculative mania. The Chinese did right by constricting the amount of money that goes into these things (even though they have some serious problems with non-performing loans.) Real estate is an investment that can net huge financial gains, but as far as furthering a country’s economic growth it does very little to generate the necessary gains in total factor productivity that one needs to keep that growth sustainable.
31 · Al beruni said
Except for the fact that the price of even the bare essentials like food is going up. For a country like India where at least 200 million people are suffering from starvation diets and 100s of millions others are on the brink, such inflation in food prices could lead to massive famines.
Even in the depths of economic depression the developed nations of the world will still look like paradise compared to India Shining.
32 · Dilip said
Sad but so true. That kind of thinking, so common among indian pundits, shows a lack of both intellect and character.
33 · DesiInNJ said
Saying that the influence of ‘caste’ and other group identities in India is non existent is a ludicrous argument. You could see some of the writing on the Tirapur garment district and how caste has been used to facilitate entry into the workforce. You could also note OBC politics and the ways in which different groups (often not forward caste, but powerful members of dominant castes like lingayats in Karnataka) have helped different groups secure benefits. So yeah, what you’re saying is at least as oversimplistic as what kayastha_girl said and on top of that is denying some very real forms of interaction between economics and social organization.
On the big picture, the idea that ‘caste’ and other factors have nothing to do with who has money and who doesn’t in India is not historically sound and flies in the face of a lot of what we see. Across political parties at independence and in the Indian nationalist movement, including parties with “left” ideologies, upper caste and upper class people dominated. As noted above, things have changed, but that doesn’t mean that these realities had no influence nor is there a very compelling argument that they have disappeared. You could see the Arjun Sengupta article in EPW (available at sanhati.com), Francine Frankel’s political economy of India, Partha Chatterjee or Sudipta Kaviraj’s writing on “The Passive Revolution”, or Barbara Harriss White’s work on intermediate classes and the informal economy and all kinds of other stuff to see how things play out.
Capitalism as a system is global, not national. It doesn’t work on the basis of individual effort alone and the extent to which this matters at all is HIGHLY conditioned by the access you have to opportunities and the barriers that are placed in front of you (whether through casteism, nationality, gender, . If you don’t see this, this probably means that the opportunities you have had were reasonably satisfactory or the boundaries that were placed in front of you were fairly minimal – either that, or you bought into the ideology of liberalism (the two are not mutually excuslive ;).
Usually people get “handouts” when they mount political pressure or the groups who conrol resources have some other interest in providing them. So Tata and Reliance get plenty of handouts in the form of subsidies (whether overt or implicit, like “Nehruvian socialism” which funded capital goods industries). Farmers in India tend to get less on average 😉
Arguments for redistribution in India usually serve to maintain political stability and even “radical” reform like land reform sets up the stage for breaking the power of the agricultural landholding class and mechanization of agriculture. That’s actually why a lot of nominally socialist countries or others had strong state involvement in breaking the power of social classes to extract “handouts” at the cost of good industrialization policy (e.g. Japanese colonialism in South Korea and subsequently the South Korean state). on the other hand, where the state is too weak to keep powerful social forces from impeding good industrialization policies (e.g. India’s agricultural classes at indpeendence and thereafre as well as other groups including individual companies or business houses or the U.S. today with finance capital actually getting in the way of pro-market solutions like regulating or eliminating derivatives, establishing public health care, eliminating global warming, writing off bad debts by homeowners at the source of the financial contagion), you get worse strategies in the long run.
Got it? 😉 So please take your male privilege and nasty tone towards others and go find some empirical backup for your rage.
21 · Rahul said
The sector I know most about is hospitality, which overlaps into real estate. In that sector, which emblematizes the problem of excessive global integration without adequate creation of local industry or demand or broadbased growth strategies, they’re probably going to face difficulty in raising debt which will hinder expansion at minimum and probably curtail a lot of the projects that have been announced already as companies like Hilton and Accor cut back or go into stasis mode. That, in turn, could reduce what was an overheated real estate market (combined wiht other steps), aprticularly if Mr. prime minister and the rest of the politicians that have bought into the neoliberal consensus don’t wake up and realize that they need to protect the Indian economy and move away from the gradual liberalization towards gradual protection and more effective state politices (the state hasn’t really stopped being involved in the Indian real estate market – it just does so on behalf of companies to clear title and provide cheap land and provide other subsidies).
I’m not sure what the Indian government’s sources of revenue are either, but I would imagine that given how little taxation it secures from the rich, it would have some revenue problems. Plus the currency exchange rate declining helps exports potentially, but if the markets that it exports to and the sectors in which it exports decline, it would damage the economy. So BPO and IT business-to-business? not so much with a U.S. recession. More funding by the Japanese for infrastructure like the Delhi metro? not so much with a Japanese recession. Even in sectors that are more likely to sustain a hit – like clothing – it seems like India would take a hit with a recession + currency declines in the Euro area, Australia, and other places.
Add to that the enormous amnount of social violence you’re going to see (are seeing, but it’ll probably only go up) from inflation in food prices and a declining currency rate and potentially fuel prices, and the turmoil this creates, decline of India’s attractiveness as an FDI desintation (which itself as noted above will probably decrease anyway), and the costs of social violence by itself, and the potential political repercussions (warfare with Maoists and other insurgent groups, fragementation from regional disparities, potential reaction by Hindutva to restore state order along the lines of the emergency, the lack of a centrist pro-people party in India, and you have a recipe for political disaster which almost always causes economic disaster even if a cleansing might be necessary). And then there’s the prospect of overshooting changes so that good practical industrialization policies (however limited) are not adopted but instead you have ideological solutions of various kinds.
The one thing India has going for it is that the political system is SOMEWHAT flexible in managing these kinds of problems and has only had one major problem – the chaos –> Emergency – that ended up questinoing the basic model, which provides a lot of stability over time. From an American desi vantage point it might look quite ugly and may even pass the point of acceptability, but from Indian vantage points it might be a bit more within the realm of “normal.” India has a lot of social violence even in times of high GDP growth / non recession.
Just some guesses here, but that’s how we start learning 🙂 btw, Amardeep, thanks for making this an explicitly discussion based post. These issues are too difficult to understand for nonspecialists like me and most other folks without collective conversation, so it helps a lot.
Dr. A,
If only you’d been in charge, you would have known which levers and pulleys to manipulate to make everything just so perfect.
M. Nam
40 · MoorNam said
No, I would have known that I don’t. 😉
38 · Dr Amonymous said
I don’t think any of this undercuts what he said. Even if caste is an issue in determining the distribution of wealth, handing money out to people who are undereducated and have little ability to use that money to grow the economy is just plain unproductive and, given enough time, that money is going to end up in the hands of the educated people who know how to handle the money anyway. India is not a rich enough country right now to offer an education to everyone who wants it. It’s not male privilege or unfocused rage. It’s just fact. If you want to talk about building more capacity to educate India’s poor that’s great. But too often the tone of the discussion around ameliorating inequality revolves around impoverishing the rich rather than uplifting the poor.
I’m a bit suspicious of declarations that “we need to spread money around” just for the sake of throwing money at people. Come to me with specific programs and economic development projects and I’ll be all ears. But I really don’t see how compromising macroeconomic growth for only marginal changes in social welfare would be good for anybody in the long-run.
NaraVara: >>handing money out to people who are undereducated and have little ability to use that money to grow the economy is just plain unproductive and, given enough time, that money is going to end up in the hands of the educated people who know how to handle the money anyway.
Spot on.
People who talk about redistribution of wealth don’t know the basic fact that wealth is being redistributed all the time – from the fools to the intelligent, from the spenders to savers, from those who seek safety to those who take risks, from the lazy to the hard working, from those who think short-term to those who think long-term…from those who want something for nothing to those who want nothing for nothing and something for something.
Unless of course, the goal is to penalize the intelligent, saving, risk taking, hardworking folks. Then all bets are off.
M. Nam
With all due respect, it will be easier to follow the discussion if comments are not written like they are posts and while quoting other comments it will help if only the relevant portions are quoted. I am sorry if it is not my place, but lengthy comments which in themselves can be quotes can be posted elsewhere and the particpants can be pointed to them.
44 · umber desi said
Okay, okay fine 🙂 Thank you for communicating so kindly – it’s appreciated.
Dr Amonymous … you sound like a tenured academic who has no real exposure in running a business. While my Family lost immense wealth to the license and babu raj….left winger babus like you kept digging irrelevant anecdotes to destroy capitalism and promote socialism in India. When crores are lost, hundreds of jobs are gone and somehow the banis/brahmins/castes/dalits etc. etc. are the reason then the rage is fully justified. Maybe the wretched condition of India does not bother you, maybe you think it’s their karmic destiny, maybe you donate time and money to a NGO, but only an idiot or someone with a predetermined agenda blames the caste system in India for it’s current ecomonic condition.
So again, men and women, if you have the balls then go get your piece of the pie.
43 · MoorNam said
Hogwash.
Anyone can see that the best and the brightest in any society do not usually end up as the wealthiest capitalists. More often than not its inheritance, connections, corruption, luck, greed, exploitation, predation, theft, deceit or dishonesty that lead to fortunes. Which is why the business class has historically been held in relatively low esteem in almost all cultures, from Confucianism to Hinduism.
To allow the business class free reign is to put the fox in charge of the chicken coop. It is an invitation to disaster. The current global financial crisis is a good example of that.
Of course selfish, greedy (and hypocritical)l creatures like the casteist “libertarians” here (a contradiction by definition) will cry and whine about any attempts by “do-gooders” ( a vile epithet among their ilk) to tax their surplus incomes in order to provide a safety net and equal opportunity to those who did not benefit from the imperfect socio-economic system.
It is noteworthy that the most respected capitalists and businessmen of good character such as Warren Buffett, Bill gates of Microsoft and Steve Jobs of Apple among others, dont see anything wrong with such distribution of wealth for the social good. Its always the likes of Moornam et al who are the ones deeply offended by any attempts by the government to level the playing field.
46 · DesiInNJ said
It is a lie to call the license raj “socialism”. That was a corrupt, treachorous nexus between the bureaucratic babus who were overwhelmingly brahmins and the selfish and greedy baniya industrialists and businessmen.
What happened to all the billions India received in foreign aid during Nehru’s corrupt alliance with baniyas? As the American president complained to the chinese leadership, it all disappeared down a rat hole. More likely it ended up in swiss bank accounts. I have read reports that corrupt Indians have a massive amount of dollars stashed away in swiss banks, by some reports over a trillion dollars. Thats ugly, obscene and treacherous. Justice demands that these corrupt people be made to pay for their criminal treachery.
Actually only an idiotic defender of the brahminical caste system would deny that this patently false and unfair system deserves much if not most of the blame for India’s horrifying conditions.
Valmiki, wow you are incorrect on so many fronts. Somehow a perfect license raj would have created wealth were it not for the treachorous brahmins or greedy banias. What baloney. Somehow a fully fair Capitalist society would have uplifted everyone, such as what, the US/Europe/Japan? If the caste system economic model was perfect then a highly affluent society like the US or Europe would have emerged in India, unless you have selective memory on Western capitalism.
As for societies that put rank Business people below soldiers, priests or politicians, are doomed to poverty. Finally, the trillions somehow tucked in secret Swiss accounts sounds juvenile.
49 · DesiInNJ said
Hmmm, so you are saying that the brahminical caste system which ranks baniyas like you below priests and soldiers has doomed India to eternal poverty? So why the heck were you defending the same caste system from blame for India’s abject povery just a post ago?? It is hard to reason consistently when you cling to an indefensible agenda, isnt it?
It sounds obscenely greedy and treacherous to me. Imagine a class of citizens of a country as hungry and impoverished as India, stealing food from the mouths of starving children and hoarding it in over fed foreign countries. How on earth can people like you justify such wickedness?
http://www.hindustantimes.com/StoryPage/StoryPage.aspx?sectionName=IndiaSectionPage&id=8c0c96a2-87db-4218-b2c8-7a568d59bf98&&Headline=India%2c+anybody+home%3f
“The rate of poverty decline between 1990 and 2005 has been lower than that between 1980 and 1990. 75.6 per cent, or 82.8 crore, of Indians live below $2 a day in terms of purchasing power parity exchange rates. This was confirmed by the government’s study that showed 78 per cent of India surviving on less than Rs 20 a day. On the other hand, the Swiss Banking Association Report, 2006, reveals that Indians lead the world with deposits worth a staggering $1,456 billion  more than the combined amounts for the rest of the world.