Any discussion on how to unshackle India should start with a disclaimer and a request.
The disclaimer : These are my opinions and they are biased.
The request is a corollary to the disclaimer : Please be indulgent and patient in equal measure.
Lets start with what's our goal - since problems and solutions are best talked in relation to a goal. Different people lay different goals for India.
-Improving living standards of our countrymen
-Removing poverty.
-Achieving complete literacy for Indians.
-Making India a superpower.
-Ridding India of corruption.
-Creating social harmony in India.
-Sundry others.......
To my mind, all these are either means to an end or a problem stated as a goal. They are either vague or too narrow. I want to set a concrete and broad enough goal for India. My goal is for India to become the World's Largest economy in terms of GDP (absolute $s). All other goals in my mind lead up to this goal. Stating the goal in economic terms also takes it beyond social, religious and regional overtones that run the risk of derailing our discussion.
Now, what's the barrier to achieving this goal, what are the causes of these barriers and what are some possible solutions?
Over the next few days, I want to explore these areas and would love to hear your thoughts. Does anyone have a goal that is more inspiring and concrete than this?
Monday, August 06, 2007
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5 comments:
every individual feels they have an equal opportunity to maximize their potential....
Agree with you that this is a noble mission. Freedom for social and/or economic ascendancy is a critical factor in growing India. I believe this is a necessary condition to achieve the economic goal, but may not be concrete enough in itself to become the goal.
Facts:
As of 2006,
1. India is #12 or #13 by GDP (source: IMF and World Bank respectively). Neck to neck with South Korea.
Side fact: #118 or #124 based on GDP per capita PPP-normalized (source: IMF and CIA respectively).
2. GDP of USA at #1 is growing at 3.3%. GDP of India is growing at 9.7%.
3. China at #4 is growing by 11.1%. Russia at #11 is growing at 6.6%. Besides these, no other country in top 12 is growing at a rate greater than 3.6%.
4. US GDP is about 15x of India, while China is about 3x of India.
5. At the current growth rate, in 40 years (our lifetime based on life expectancy as Indians), China would be at 177 trillion, USA at 48 trillion and India at 36 trillion.
My point:
A goal should be SMART: Specific, Measurable, Achievable, Relevant and Time-bound. Your goal meets the first two criteria, but does not meet the other three.
Time-bound: easy to fix. And for the goal to be actionable and real, it should be within the life-time of those who you are appealing to. Else it becomes theoretical. "We leave it to our kids to finish what we started". Stretched wide, this would be 40 years.
Achievable: the goal of #1 by GDP is not achievable in our lifetime. (Source: facts section).
Relevant: this is the hardest one, and alludes to the main question you are asking in your post. I am not convinced that #1 by GDP is the most relevant goal. I would argue that GDP (PPP) per capita is more relevant than GDP, and there are likely even more relevant goals. By GDP (PPP) per capita alone, we are very very far away from breaking into the top 30 in the world in our lifetime, or even top 10 if you only consider nations with "significant" GDP's. Like someone said "anything divided by 1 billion is small". Absolute GDP seems more "marketable" that you can rally the troops around. Then again, that is not the best reason to pick it up as the measuring stick in the first place.
Kashyap - these are great points and indicate that there was more clarification needed to explain my stance and approach on Goals.
Goals should be SMART - that much I agree. But it's in the expansion of SMART that there are differences of ideology, I suspect. For me SMART is Stretching, Motivating, Accountable, Relevant and Time-bound.
I agree with your points about Time-bound and Relevance.
I agree that we won't get to our goal of #1 in our lifetime. And that might force us to lay down markers and milestones. But this is not an endeavor of one generation. It'll be a relay race where we start but our younger team-mates finish the race. And a good relay team ensures that the 'baton' is not dropped in exchange.
Relevant - I agree that GDP per capita is the real deal. However that shouldn't belittle the importance of achieving primacy on total GDP. Being the biggest GDP nation affords scale & leverage in Trade, Geopolitics and Security. That being said, total GDP is admittedly a choice driven by the M & T of SMART
Accountable refers to the 'S' and 'M' in your acronym.
Stretching - Goals should seem unreachable to spur 'out of the box' thinking. If they seem achievable, they lead to incremental thinking. Have seen this happen in business and in person and believe that a little bit of discomfort when you look at a goal is a good thing.
In any case, if all we peg ourselves to, is the current growth rates, then this discussion is moot. Doing what we are doing should get us there.
Motivating - #1 is a much better rallying cry than #3 or #4. We might end up at #2, and that's ok but we have a higher chance of getting there with a motivating goal than a 'uhhun' goal.
Now, of course stretching should not give you license to go berserk. If India grows at 9% for the next 60 years, US grows at 2.5% and China is at 7.5%, we will be in touching distance of being #1.
Has such high rate of growth been achieved before? Well, China has been growing at 8% since 1978 -almost 30 years. But, I think it will find it difficult to sustain that rate for the next 60 years given an aging population and diminishing returns. The US growth rate is in low single digits and will remain so unless fuelled by massive immigration and/or discontinuous innovation. India is in early stages of growth, its population is young, its capital infusion per capita is low and so it lends itself to an exploration of factors that will drive sustained high single/low double digit growth.
That is the endeavor of this series. Hope we are successful.
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