Hafizzz
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Can India Leapfrog China?
Can India Leapfrog China? - NYTimes.com
DAVOS, Switzerland India is trying hard not to be forgotten at the World Economic Forum amid the China-focus. The country has brought the single biggest delegation to Davos and ads for its Inclusive Growth slogan could be seen not just in the conference center but on public buses in Davos.
Indian executives here prided themselves on the things that set their country apart from its biggest rival among emerging markets, China: democracy, a reliable legal framework for investors, a widespread command of English, a young population due to overtake Chinas by 2030, and of course its famed information technology sector.
But there was also an acute sense of envy of Chinas superior infrastructure, Beijings capacity to map out long-term economic development unbound by election deadlines and the countrys comparatively high literacy rates, particularly among women.
Despite a 1.1 billion-strong population, India is facing talent shortages and not just at the very top. Were running out of electricians and plumbers because our education system is not keeping pace, said Raghuram Rajan of the University of Chicago.
Ingrid Srinath Narasimhan, the secretary general of the nongovernmental organization Civicus, warned that despite the governments pledges to the contrary, growth in India had not been inclusive. Child malnutrition had barely improved over the past two decades, she said, and caste politics still excluded millions of people from real opportunity. While most children now enrolled in schools, 65 percent drop out and only 12 percent go to college. If you are in the bottom third, life is universally worse than 20 years ago, Ms. Srinath Narasimhan said.
With its I.T. sector unable to accommodate hundreds of millions of prospective employees, India is trying to expand its manufacturing sector to absorb more labor.
But at least some here hope that India can skip at least some of Chinas factory-of-the-world strategy. Could you leapfrog manufacturing? Mr. Rajan asked. Can education be the passport to a service economy?
As Indian business leaders mused about the importance of becoming more competitive, one American chief executive felt almost at home, especially after President Barack Obama stressed the same theme in his State of the Union address. I thought for a moment I was in the United States, said Harold McGraw, head of the McGraw-Hill Companies.
India won't be able to leapfrog China in the near future but anything is
possible....
India: bad for business?
India: bad for business? | beyondbrics | News and views on emerging markets from the Financial Times ? FT.com
Its no secret that doing business in India can be onerous, right from the simplest task of securing a visa to getting regulatory approval for land acquisition. Even government ministers speak of the burden of red tape.
And now, a new survey has crowned India as the most over-regulated country in a survey on Asian business and politics by Hong Kong-based Political and Economic Risk Consultancy (PERC).
India was rated worst in terms of over-regulation, scoring 9.16 points out of 10, followed by China with 9.04 points with Japan coming in third with 3.28 points. Hong Kong beat all other Asian investment destinations scoring the best at of 0.98 point, while Singapore was second with 1.08 points.
The survey carried out in the last quarter of 2010, was based on responses from 1,370 US executives about regulatory conditions in the US to provide a benchmark against which to assess the Asian scores.
According to the survey, Indian regulations are complex and lack in transparency. Standards and certifications procedures are also tedious. It can take up to two months to register property, almost 200 days to obtain a construction permit, over 1,400 to enforce a contract and seven years to close a business.
Documentation requirements for both exports and imports are onerous, the PERC survey pointed out. Labour requirements are strict and companies lack flexibility on hiring and firing workers, it added. Regulations in the country were frequently not enforced, leading PERC to question why they were on the books at all.
These are just a few factors preventing much-needed investment to India.
Higher levels of FDI are crucial for India to achieve its ambition of double-digit growth. Duvvuri Subbarao, Indias central bank governor, has warned that India needs a quantum step in investment if it is to propel its growth rate higher than the current 8.5 per cent.
But, its not all bad. The Ernst & Young India attractiveness survey published this week showed that half of all global business leaders interviewed were positive about the country, with 75 per cent per cent of global businesses who already conduct business in India indicating that they would expand their operations.
While the outlook for India is still bright, the country needs to push business-friendly national and state-level policies if it is to see significant investment in its growth story.
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, no football..
