Friday, September 01, 2006

Chill Out...

What he does is what is planned this weekend. Well we don't have a pool but you get the idea.

Some of my readers from India might find this piece in the Friday NY Times interesting. *A* and avid reader pointed it out to me. It is an interesting read even if you are not from India.
Parts that I found interesting are below. Read the whole thing.

India’s annual growth in manufacturing output, at 9 percent and accelerating, is close to catching growth in services, at 10 percent. Exports of manufactured goods to the United States are now rising faster in percentage terms than China’s, although from a much smaller base. More than two-thirds of foreign investment in the last year has gone into manufacturing in India, not services.

“Saying we are a back office and China is a factory is a backhanded compliment,” said Kamal Nath, India’s minister of commerce and industry. “It’s not really correct.”

Indeed, in interviews at 18 Indian factories and other businesses in 10 cities and villages scattered across the length and breadth of the nation, the picture that emerges is of a country being driven by advances in manufacturing to a much brisker pace of economic growth.

A prime reason India is now developing into the world’s next big industrial power is that a number of global manufacturers are already looking ahead to a serious demographic squeeze facing China. Because of China’s “one child” policy, family sizes have been shrinking there since the 1980’s, so fewer young people will be available soon for factory labor.


This is something that is a huge roadblock and every time I visit I realize the infrastructure just sucks.

Plenty of obstacles remain, however, notably India’s weak infrastructure. China invests $7 on roads, ports, electricity and other backbones of a modern economy for every dollar spent by India — and it shows. Ports here are struggling to handle rising exports, blackouts are frequent and dirt roads are common even in Bangalore, the center of the country’s sophisticated computer programming industry. Pervasive corruption has slowed many efforts to fix these problems. India’s labor laws, little changed since they were enacted just after independence in 1947, also continue to discourage companies from hiring workers, by making it very difficult to lay off employees even if a company’s fortunes sour or the economy slows.

Labor laws, however, discourage flexibility. They still ban companies from allowing manufacturing workers to put in more than 54 hours of overtime in a three-month period even if the workers want to earn extra money. Firing workers is extremely difficult.

“Companies think twice, 10 times before they hire new people,” said Sunil Kant Munjal, the chairman of the Hero Group, one of the world’s largest manufacturers of inexpensive motorcycles.

Bad Roads and Blackouts Take a Toll on Efficiency


The Chinese economy grew at a breathtaking pace of 11.3 percent in the second quarter of 2006, but consumer prices were just 1 percent higher in July than a year earlier.

By contrast, India is struggling with 8 percent inflation this summer as bottlenecks have appeared after three years of 8 percent growth.

Belatedly, India’s roads and ports are improving. Just four years ago, Sona Koyo Steering Systems, an auto parts manufacturer, incurred hefty financing costs to keep a month’s inventory on hand in case deliveries were delayed. Now its factory in Gurgaon makes six deliveries a day to a nearby Maruti car assembly plant; the eight-mile drive takes an hour or more because of traffic jams, but the deliveries get through.

“I’m not going to deny infrastructure is bad,” said Surinder Kapur, Sona’s chairman and managing director. “But a lot of our vendors are around us, a lot of our customers are close to us.”

India is also starting to address chronic power shortages. But it is still a serious problem in northern India, where Mr. Kapur has his steering systems factory. He receives electricity from the national grid just seven or eight hours a day. So the factory has three enormous diesel generators, one bigger than a typical Manhattan living room, operating at four times what an industrial user in the United States usually pays.


starry nights said...

Really interesting to read about all this growth in India but the infrastructure is really bad. I grew up in Bangalore and I think it was better when Iwas young, now the roads are crowded and just bad.But I am always happy when I read all this good stuff about India.nice to know we are up there with the other countries.

Aditi said...

Great read unfortunately my brain was still with the puppy in the pool for most of the reading

Mr. J said...

Wow... nice read. With this heat, I wish I had a pool to just slip into. Have a nice weekend.

Varsha said...

nice foto......great colletion of photos!!

Interesting read....

Varsha said...


Ash said...

What a cute doggy...lovely photo!

Kuan Gung said...

It's interesting watching both of these countries begin to move at such great speed...

karmic_jay said...

@Starry.. Ya I recall a better Bombay too.

@Aditi.. Aww..

@me. Thks Me you too.

@Varsha.. Thanks

@Ash Thanks

@Kuan. Thanks for stopping by.

Keshi said...

India is booming in the same time falling apart in infrastructure. There's lack of coordination and planning.


Dadoji said...

I haven't read the whole article but I had mentioned demographics 3 years ago during a discussion in US and I was laughed off. Another factor going for India is the financial markets and health of banking system. We need infra, power and un-quota-ed education. The most important aspect is that India, as a country, has attached more importance to knowledge than labour. Ultimately, ya vidya sa vimuktaye, vidyadhanam sarvadhanapradhanam etc. etc.