Discussion in 'Politics' started by ertrader1, Oct 20, 2003.

  1. ertrader1

    ertrader1 Guest

    Very interesting that CNBC is introducing why and how INDIA is vital to US companies.

    CNBC being used as a political tool.....not just to hype markets but to say that outsourcing is not only Profitable but that the US should accept the flight to cheap labor.

    Now, as a trader...i give two shits as long as the market moves. However, if we continue to outsource will be interesting to fiquer out what our GDP will be.

    Top Stories - The New York Times

    Sizzling Economy Revitalizes India
    Mon Oct 20, 8:55 AM ET Add Top Stories - The New York Times to My Yahoo!

    By AMY WALDMAN The New York Times

    GURGAON, India Tarun Narula, a 25-year-old computer instructor, celebrated Mohandas K. Gandhi's birthday on Oct. 2 by going to the Metropolitan Mall. So did so many thousands of others that the parking lot was full, as were those of the other two malls across and down the street. Indian-made sport utility vehicles, cars and motorcycles fought for space, choking the roads of this satellite city south of Delhi.

    Inside the malls, young people sipped coffee at Barista Coffee, the Starbucks of India. They wandered through Indian department stores, Marks and Spencer, Lacoste and Reebok. Families took children to McDonald's, or the Subway sandwich shop. Moviegoers chose between "Boom," a Bollywood film with a decidedly Western touch of vulgarity, and "2 Fast 2 Furious."

    This is no longer the India of Gandhi, among history's most famous ascetics.

    The change in values, habits and options in India not just from his day, but from a mere decade ago is undeniable, and so is the sense of optimism about India's economic prospects.

    Much of India is still mired in poverty, but just over a decade after the Indian economy began shaking off its statist shackles and opening to the outside world, it is booming. The surge is based on strong industry and agriculture, rising Indian and foreign investment and American-style consumer spending by a growing middle class, including the people under age 25 who now make up half the country's population.

    After growing just 4.3 percent last year, India's economy, the second fastest growing in the world, after China, is widely expected to grow close to 7 percent this year.

    The growth of the past decade has put more money in the pockets of an expanding middle class, 250 million to 300 million strong, and more choices in front of them. Their appetites are helping to fuel demand-led growth for the first time in decades.

    India is now the world's fastest growing telecom market, with more than one million new mobile phone subscriptions sold each month. Indians are buying about 10,000 motorcycles a day. Banks are now making $15 billion a year in home loans, with the lowest interest rates in decades helping to spur the spending, building and borrowing. Credit and debit cards are slowly gaining.

    The potential for even more market growth is enormous, a fact recognized by multinationals and Indian companies alike. In 2001, according to census figures, only 31.6 percent of India's 192 million households had a television, and only 2.5 percent a car, jeep or van.

    Foreign institutional investors have poured nearly $5 billion into the Indian market this year, already more than six times last year's total. The Bombay Stock Exchange's benchmark Sensitive Index has risen by more than 50 percent since April, hitting a three-year high. Foreign exchange reserves are at a record $90 billion.

    After huffing and puffing in place for eight or nine years, "the train has left the station," C. K. Prahalad, a professor at the University of Michigan Business School, said of the Indian economy.

    More than a decade after India began opening its economy by reducing protectionism and red tape, slowly lifting restrictions on foreign investment and reforming its financial sector, the changes are starting to show substantial results.

    Companies that stumbled in the face of recession and new competitive pressures in the 1990's have increased productivity and are showing record profits. India is slowly making a name not just for software exports and service outsourcing, but also as an exporter of autos, auto parts and motorcycles.

    Nature has played a part as well. The seasonal monsoon that ended recently was the best this agriculture-dependent economy has seen in at least five years, with normal or excess rainfall in 33 of 36 of the country's sub-regions. That, in turn, is putting income and credit in rural pockets, spurring a run on consumer goods that will only strengthen when the harvest comes in later this year.

    In some places, the economic transformation is startling. Look at islands of prosperity like Gurgaon, or Bangalore, and you see an India that many Americans not to speak of Indians would not recognize.

    It is a place where a young fashion designer like Swati Bhargava, 27, who works for a company that exports clothes to American and French chains, can buy stylish Indian clothes, eat at Pizza Hut, drink at Barista and contemplate the country mutating around her.

    "The culture is changing," she said. "People are becoming more broad-minded."

    One sign of change is the proliferation of malls. India's first opened only in 1999, and its second in 2000, according to Harminder Sahni, a principal in KSA Technopak, a management consulting firm in New Delhi. By the end of next year, it will have almost 150.

    Of course, truisms about what holds India back have not disappeared. The shortfalls in infrastructure, particularly power and education, are staggering. Twenty-six percent of Indians still live in poverty, and data suggest inequality is widening even as the poverty rate falls. Overall employment is essentially stagnating.

    The heavy dependence on agriculture, which still accounts for 25 percent of gross domestic product and 70 percent of employment, means that a bad monsoon, like the one last year, can hobble the economy.

    The country remains politically dependent on subsidies that have helped swell fiscal deficits that limit growth and investment in education and health. A recent Supreme Court ruling suspending the sale of shares in significant state-owned industries prompted concerns about the slowing of economic reforms, as do continuing red tape and corruption.

    Moreover, not everyone embraces change. Many bemoan the aping of Western culture at the expense of a much older and richer Indian one.

    Still, an acceleration of the transformation seems inevitable, in part because the booming consumer culture is being driven by the young. The youth of India's population is a demographic trend of such economic and cultural significance that even the country's aging leadership recognizes its importance.

    Yogesh Samat, the chief executive of Barista, which was founded four years ago and now has 125 coffee bars across the country, said that before economic liberalization began in 1991, "there was a great deal of guilt associated with spending of any kind; saving was the done thing." But today's youth those born in the 1980's never experienced either the shortages or the psychological constraints of the country's socialist, Soviet-oriented past, he said.

    "Consumerism as a term is no longer seen as a bad word," Mr. Samat observed, "and the acquisition of material things is no longer seen as going against Indian traits."

    The young people at the Gurgaon malls would agree. Most of those interviewed here work, a change itself from the past, when jobs for college-age students were few.

    Most of them have jobs in service industries, like hotels or marketing, that now constitute about half the economy. They tend to live at home with their parents, following Indian tradition, meaning that almost all of their income is disposable.

    Mr. Narula, the computer instructor, for example, earns $2,173 a year, more than four times India's per capita income of about $480. He lives at home, and has spent his money on a Nokia (news - web sites) phone, a Maruti car and clothes. On Gandhi's birthday, he spent about five hours with his friends at the mall, eating at McDonald's and watching "Boom."

    The lifestyle changes for this cohort have come at warp speed. Mr. Sahni of KSA Technopak is only 35, but marvels at the variety open to young Indians today. "When I was a young person, nothing was happening every day, life was the same," he said.

    No longer. A year ago, India was in a national funk over China having surged ahead economically. Now, there is a cautious sense that over time, India could prove the turtle to China's hare, thanks to its entrepreneurial spirit, its strong higher education system and its democracy.

    "There's a lot of confidence in India today, even in respect to China," said Jairam Ramesh, the senior economic adviser to the opposition Congress Party.

    India now has a $500 million trade surplus with China, and Indian companies increasingly see China less as a threat than an opportunity. A delegation of Indian industrialists is now in China to market everything from steel to pharmaceuticals.

    Indian companies say the advantages of the country's high-skilled, low-cost work force are outweighing the disadvantages imposed by its infrastructure and bureaucracy, and even there they see improvement.

    Ratul Puri, the executive director of Moser Baer India, which has become the world's third largest producer of recordable media like DVD's and CD's, said his company had recently built the world's largest production site for such devices 1.5 million square feet in Noida, another Delhi satellite city, in just six and a half months.

    "Pre-1991, it would have been impossible," Mr. Puri said. "We would have spent six and a half months trying to get the license for construction."
  3. India prior to the Moslem invasions was one of the world’s great civilizations. Tenth century Hindustan matched its contemporaries in the East and the West in the realms of philosophy, mathematics, and natural science. Indian mathematicians discovered the number zero (not to mention other things, like algebra, that were later transmitted to a Moslem world which mistaken has received credit for them.) Medieval India, before the Moslem invasion, was a richly imaginative culture, one of the half-dozen most advanced civilizations of all time. Its sculptures were vigorous and sensual, its architecture ornate and spellbinding. And these were indigenous achievements and not, as in the case of many of the more celebrated high-points of Moslem culture, relics of pre-Moslem civilizations that Moslems had overrun.

    Moslem invaders began entering India in the early 8th century, on the orders of Hajjaj, the governor of what is now Iraq. (Sound familiar?) Starting in 712 the raiders, commanded by Muhammad Qasim, demolished temples, shattered sculptures, plundered palaces, killed vast numbers of men — it took three whole days to slaughter the inhabitants of the city of Debal — and carried off their women and children to slavery, some of it sexual.

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