Indian growth rate is 8%?
Well, well you have to believe what the government tells you, right? No. Wrong. You need to see what is happening around you to guess what the growth rate can/ will be.
1. I spoke to a HR consultant she told me ‘Jobs paying more than Rs. 40 lakhs have just vanished. Recently when the Eastern zone sales head quit his job, the management quickly got the South sales head to handle South and East.
2. Banks which are recruiting fresh MBAs are also willing to look at smart graduates!
3. A few MBA institutes have been forced to shut down – the number of people signing up for a MBA degree has clearly gone down!
4. One bank which hires MBAs in large nos. has not revised its starting pay for the past 3 years – and they are getting the numbers that they want!
5. At least 2 banks have tied up with MBA institutes to recruit fresh graduates and give them a trainees job and an MBA degree at the end of 2 years! Dramatically reducing costs for the bank!
6. Just to take on Mayawati there is a stupid legislation which says you should pay 4 times the price of land – this means infra projects will not go on. Simple.
7. Infra companies like GMR are quoting at Rs. 19 and looks over priced to fund managers managing infra funds. Vow – some message to the common man?
8. NREGA ensures that labour is not available for other projects…but some surveys show that the ‘intended beneficiary’ is not getting the money.
9. Most scams have enriched UPA – which seems to be reconciled to not coming back to power. Extent of loss to the exchequer is IMPOSSIBLE to guess….God bless.
10. If Raja was allowed to make all the money and PC did not get anything from it, Raja should be given the Bharat Ratna. If Subramanyam Swamy can get the Supreme Court to pass strictures against PC, MMS and UPA (by implication) SS deserves the Bharat Ratna….(both in the Super Heavy Weight Snatch category)
Sivagnanam
I like the 10th point most. Very humorous and true.
Nir Dhar
The key drivers of the recent growth are more to do with the increase in money supply rather than the productivity increase of the system. If the RBI reduces rates next year, it is entirely likely that they hit the growth targets. Whether it really increases prosperity is a different question altogether.
From past record in this century though, not many countries have been successful growing at 8% without high inflation.
Vikas
Points 1 to 5 are meaningless indicators of economic health. You will find that most of them are true even during boom period as well. And no, 40L+ jobs are still very much around.
8 is contradictory. The scheme is working at some level that there is a shortage of labor. The appropriate criticism is that this money and effort could have been used to create useful infrastructure.
9 and 10 are spot on.
krish
I was reading an article which tells us that market return over the 5 year period is only 2.65% and did not even return the savings banks rate. Even the medium term investors are hit hard.
In the real world, it is simple logic and why our political leaders do not understand. No one would trust the individual with high debt. Same goes for the institution or a nation. Our fiscal deficiet is widening.
The high debt loads leads to breach of credibility. The spiral effect would quickly set in. Access to capital would come with stiff terms and conditions. Some times it would be difficult to raise the capital itself. The borrowing costs would raise leading to more taxes, inflation and currency devaluation.
If our policy makers think that attracting FDI alone would solve the problem, we are set for the disaster.
pravin
@vikas.. what? NREGA is causing a labor shortage -and that proves it is working? you mean it was a scheme to create labor shortage?
could have been used to create useful infrastructure: good pipe dream.
Vikas
pravin
you got it all wrong.
my point is simple NREGA can not be working – that is providing employment to people – and a failure – as in large scale corruption and siphoning of funds – at the same time.
if it is was a case of large scale corruption then labor would not get paid and they will be back to their regular jobs. result: no labor shortage.
since there is a labor shortage we have to assume that someone somewhere is getting paid and corruption is not RajaKalmadi in scale. one hopes.
now to your last point. you have a right to be cynical on this.
i, for one, am not sure if in three years we have created nothing useful. maybe they have actually built up some good stuff for village communities. maybe they have dug pits one season and filled them up the next season. don’t know.
the desire (or as you say the dream) is if this effort and money is used to a plan and something useful gets created incrementally. if it is happening – brilliant, i am happy. if not, lets hope someone is working on it.
Piyush
@ Subra
Awesome post yet again. GDP numbers have only now started to reflect what has been know in more informed circles for many months now. That Indian economy is getting worse by the day, primarily due to the political class. The sentiment is deteriorating rapidly as reflected in falling auto sales, retail sales, real estate sales, commercial rentals, FII & FDI inflows, currency depreciation, so on and so forth. It is very important for people to get over the euphoria of the 2000-2008 period of high confidence and adjust to the new reality, be it in lower salary and bonus, lesser job openings, lesser leveraging, lesser extravagant spending, especially on ‘show-off’ assets as Subra calls it etc.
@Vikas, going by the track record of the govt. and babus, with no clear attempt on what can the rural labour be deployed on to develop long term infrastructure for villages, I am actually highly doubtful if some positive is actually coming out of NREGA. It would have been much better if district administration had prepared a suggestive list in consultation with local panchayat etc on what could be developed for their unique needs. however, I guess tht will remain pipe dream, and NREGS will achieve little beyond funding the dynasty rule and the corrupt babus.
Also, I disagree with you that points 1 to 5 are meaningless. In fact they are both true as well as very strong informal indicators of business optimism. In boom times, companies build strong teams, give good raises to retain people, campus salaries keep going up every year, more people wnt to do MBAs even from lower rung college, as they know hiring is strong. Now all these are not happening as business confidence is weak.