r2i forum

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Just returned from a trip to India (Soutbern Tamil Nadu). Couldn’t believe whether it was the same India I saw 10 or 15 yrs back. Infrastructure has improved leaps and bounds. People look prosperous and happy. In Tamil Nadu, everyone is either an engineer or doctor. There are around 500 professional colleges. Some one was saying that the plumber and the policeman nowadays have an engineering degree. Labour is very expensive. Difficult to get people for menial jobs. In T Nadu people are double happy to claim that they have done justice to the corrupt DMK Gov to bring Amma to power. From the newspaper reports I could gather that Amma has stalled education at schools by annulling the books of previous Government and students were busy covering portions of remaining books pasting stickers over the pages. Meanwhile one could get a free cow and goat from the TN Gov as far as they have the money to bribe the officials. I was planning to get one cow but then I had to leave before September. If I switch on TV there is Jaya TV run by Amma and Sun TV run by DMK. Jaya TV news is filled with news of arrests of DMK politicians and interviews by lay people of how relieved they are to see justice served finally. If you see Sun TV, it is filled with news about atrocities of present Gov. The news content in these two channels are mutually exclusive and TV is given free by both Governments. Long live democracy and freedom!

Mood is is back in India to the older days of “India Shining” . Even lay person claims that India is a superpower. Stock brokers and bankers nonchalantly claim that stocks can only go up while peddling various flavors of investment schemes (or shall I call scams) with outrageous fee structures. ULIP is the latest scam and you can’t escape a visit to HDFC or ICICI without the bankers hustling you to buy one. Real estate looks like Florida days. Money seems to flow everywhere. When I was studying in college my average annual expense in engineering college was around Rs.5000 and my parents could not afford that. Nowadays every Tom, Dick and Harry spends around 65000- 2 lakhs per annum plus capitation fee of 5-10 lakhs at the beginning. Banks are lending freely for education purposes. Politicians travel only in SUVs (Foreign brands).

Looking at India’s GDP growth, is it sustainable? It seems Agriculture growth has stalled and agri contributes only 15% of GDP. Services and manufacturing sectors are growing.
“the FIRE sectors (finance, insurance, real estate, and business services) have been growing rapidly (17.2 per cent) and now account for an even higher share of GDP than manufacturing — a sure sign of a bubble economy.”
http://www.asianage.com/columnists/india%E2%80%99s-%E2%80%98carry-trade%E2%80%99-bubble-growing-big-086
Looks like part of the growth in India is real. Part of it is easy money flowing from abroad chasing higher returns that is in turn lent by banks. Easy money is creating high inflation.