Will India overtake America

 In 2011, the   gross world output in nominal terms, i.e. calculated as the population times the wealth per capita, stood at  US$ 69. 98 trillion.  Of this the United States accounted for    US$ 15. 09 trillion   (21.56 %) and India’s share was US$ 1.84 trillion (3.75 %). The gross domestic output of China was US$ 7.31 trillion  constituting 10.44 % of gross world output. There is considerable variation in the proportion of gross world output    on the basis of purchasing power parity (PPP), i.e. adjusted for  differences in the cost of living in different countries. It is true that recently China and India have been growing fastly and if the recent trends continue over a long period, India’s GDP will increase enormously. But to surpass the GDP of US India has to grow at a high rate (around 9-10%) continuously for a very long period, say many decades, while the growth rate of the US economy will have to hover around or remain below the current rate  of growth ( 2.3 %). Historically continued high rate of growth of GDP  for a very long period is not feasible; for cyclical changes may cause distortions in the growth performance. Moreover, if the present level of bribery, corruption, misappropriation and embezzlement of public funds persist, it will be very difficult for India to sustain the level of high growth rate for a long time. Moreover, staging away  a large proportion of the county’s output in foreign countries by politicians and crony capitalists will deprive   the country of the investment requirements to sustain high growth rate. In order to reach the current level of GDP of the US by the end of the present century India has to grow at around 8% per annum. By the time the US will also continue to grow moderately ant the current rate of 2.34%, the economy of United States would be more than  treble that of the current level of US$ 15. 09 trillion. But at present the  per capita income ( nominal) of Indians ( US$ 1,514)  is abysmally low compared  to  Americans  US$ 48,328.  The position is slightly better when comparisons of per capita incomes is made on the basis of purchasing power parity (PPP), to adjust for differences in the cost of living in different countries( US$ 48,442  for America and US $ 3,652 for India. According to OECD, India’s economy is expected to be bigger than the United States over the "long term.”  Moreover by 2100 India’s population would have reached  around 1.6 trillion while that of the US will be around  0.4 trillion; i.e  almost ¼ of India’s population. The OECD projection of the performance of Indian economy over a long period is unrealistic. It looks like paid news indented to boost the morale of the reformists.

Dr.C.Murukadas, The Times of India, Nov.8, 2012

Crowding in schools

It is quite disturbing to note that   many matriculation schools have disproportionately huge strength; some of the have even above 10000 mark. Analysis of cross-country data shows that the optimum student strength of a well equipped school with qualified teachers is 3000-5000. A school having more than the optimum level is considered as unfit for harmonious schooling, in which students are able to get proper attention and care. Crowding of thousands of students in a cramped space is against the tenets of education. The foundation for the growth and development of an individual is laid during his schooling. When too many children are huddled in a single campus, often cramped without even the basic facilities essential amenities, it becomes naturally unsuited to provide proper education. The prospects of   a child receiving adequate attention and proper  facilities for sports, games and other extracurricular activities, which play a dominant role in molding the character, temperament and personality, will be thinly spread,   i.e. the facilities and amenities  per student get diminished in proportion to the rise in the total strength of students. Keeping in mind the above factors, rules do not allow a matriculation school to have more than four sections per class.  And in exceptional cases schools can seek approval for a fifth section, if needed, from the district inspector of matriculation schools. It is welcome move that the school education department has instructed institutions to restrict the number of sections for each class to five or fewer, in keeping with the Code of Regulations for Matriculation Schools formulated in 1990. Therefore, it is surprising and shocking, to say the least, to know that one school in Chennai City is having student strength of 12000, and a number of other schools in the state, especially in Chennai and in the Salem-Namakkal belt,  are having student strength much above the level fixed by the government.   What has the school education department officials been doing all these years? Why have they turned a blind eye to such a nefarious act by the unscrupulous school managements, whose only motive is to earn hefty profit? Is it not an act of profit maximisation at the cost of   school going children?  Such an undesirable act of dumping too many children in cramped premises by the school managements should not have been possible without the connivance of government officials.  It appears that corruption and bribery are the reason behind official apathy. Therefore, the government should order a high level inquiry into this grave act of permitting too many batches in a class beyond the prescribed limit and give severe punishment to those officials found guilty. The department of school education should strictly enforce the institutions to restrict the number of sections for each class to five or fewer, in keeping with the Code of Regulations for Matriculation Schools formulated in 1990.

 Dr.C.Murukadas, The Times of India, Nov.10, 2012

Restoration of Water Bodies

Historically, the Chennai Metropolitan Area (CMA), which forms Chennai City and parts of Thiruvallur and Kancheevaram districts (Former Cingleput District), was a flourishing agricultural area for many centuries. But today due to fast growth of urbanisation agriculture has been reduced to nothing of importance. Although this region cannot boast of any perennial river/canal water resources agriculture was prosperous because of the   existence of a large number of lakes, ponds and estuaries. In fact, this region has the distinction of having the largest number of a network of lakes, ponds and estuaries in Tamilnadu. As urbanisation proceeded, many of the lakes and tanks have been destroyed to pave way for human settlement. And only a few lakes and tanks are remaining in the area Chennai City covering the city corporation limits. But reports show that these remaining lakes and ponds are being encroached upon by real estate developers and small communities. The public works department as well as local bodies has been mute spectators to the pernicious practice of encroachment of such as lakes and tanks and other water bodies. The suburban areas of CMA are estimated to have more than 3000 lakes and ponds. Although many of these  lakes and tanks are not important for agricultural requirements because of the decline farming activates due to urbanisation,  their preservation and  restoration are vital for meeting the rapidly growing demand for water in the city for domestic, industrial, commercial and other requirements. But it is saddening to note that most of these lakes and tanks are in danger of ruin due to encroachment by real estate tycoons with political patronage and official connivance. Corruption and bribery are the root causes of such mindless ruin of water bodies. The concerned officials are silent spectators of encroachment and spoil of water bodies  for they are able to fill their pockets with the illegal gratification received from the encroachers. It is gratifying to note that the government has at last woken up and plans are afoot to protect and restore the tanks and lakes   situated in the CMA. Agriculture still continues to be an important source of livelihoods in many areas of CMA. Therefore, the protection and maintenance of the lakes and tanks are important for sustain the livelihood of the remaining farmers. Moreover, the population of Chennai City and its suburbs are going to witness enormous growth of population. It is estimated that the population of Chennai City is expected to reach the 10 million mark by 2021.  So the preservation of these lakes and ponds is quite essential for meeting the demand for water for different purposes for the growing population. Moreover, restoration of the water bodies is essential to improve the local ecology and public spaces.  The plan to involve local people in the restoration projects is a good idea. The Chennai Rivers Restoration Trust, which is entrusted with the restoration of lakes and ponds, should be strengthened with more staff and adequate funds. The government should
prepare a master plan to restore and preserve all water bodies in CMA as well as in rest of the state.

Dr.C.Murukadas, The Times of India, Nov. 11, 2012

India Inc on shopping spree

Although there has  been slow down  in wave of corporate  mergers and a proliferation of strategic partnerships among corporations in the past few  during the world economic crisis,  market concentration giving a few producers or suppliers an undue amount of influence of market continues to cause alarm. The annual value of corporate mergers has risen to a 100-fold during the past two decades, reaching a cumulating $15 trillion in 2006. 32,000 deals were announced in 2006 alone; triple the numerator a decade ago and more than 30 times in 1986. Mergers across national boundaries rose even more strongly than that of all mergers. While cross border mergers were typically below 20 percent of the value of all mergers in the early 1980s, today they constituted more than one-third in 2006. The member of cross-border deals valued at more than $ 1billion rose to100 in 2006 from just 39 in 1998. In fact, cross-border mergers have been the main driving force of foreign direct investment in recent years. This means that considerable position of private capital flows goes simply to changing ownership of existing factories and other business. While acquisitions imply a long-term investment commitment, most others imply little more than a procedure to asset-stripping–retaining the most valuable parts of company and closing or selling off other parts. Recent data indicate that such corporate mergers have instead of benefitting the people have meant to more concentration and market power which translates into political influence and reckoning of labour's bargaining power. Although there has been a significant decline in the number and volume of mergers and acquisitions, concentration of market and wealth continues to be a worrisome phenomenon.  Recently many Indian Corporations have resorted to acquisition of   foreign companies. It is not a good augury. When there is large-scale unemployment, especially among educated youth, it is unwise for Indian companies to invest huge amounts in acquiring assets abroad. When the government is going all out to woo  foreign direct investment even  against public sentiment and opposition from all quarters such as allowing 51% FDI in multi-brand retail trade,  it is unwise to allow Indian corporations to invest huge amount for acquisition of foreign assets.

Dr.C.Murukadas, The Times of India, Nov.8, 2012