In the age of globalisation, saying no to foreign money is almost unheard of. But in a rare instance, the Indian government led by finance minister Palaniappan Chidambaram has been campaigning hard to curb foreign inflows into the Indian market. After all, foreign money has been relentlessly chasing the Indian growth story. Out of the $68 billion that foreign institutional investors (FIIs) have been pumping into India, as high as $16 billion have entered into the Indian market this year alone. Even in foreign direct investments (FDIs), about $30 billion is expected to land up in India, up from last year's $19 billion, including reinvested earnings. The forex reserves have been surging, and it has crossed $270 billion. By now, the India story is fairly well known to the rest of the world. A trillion-dollar economy with a GDP growth rate of 9% or so, India has been the hot favourite among emerging markets, thanks to its strong fundamentals, transparent policy framework and vibrant corporate sector. Yet, the highs of 2007 could result in major challenges in the year 2008. The big question here is whether India will be able to grow at the same pace while coping up with unprecedented phenomena such as appreciating rupee against dollar, flooding of foreign capital in a few select sectors, lack of capacity building in infrastructure sector and above all, unforeseen political turmoil emerging from a pre-poll milieu. ADB's managing director, General Rajat M Nag feels that no one doubts India's growth story by now. What's needed is a massive outlay in infrastructure. "The needs are huge, and the fiscal space is limited. As a sizeable amount of public resources has to be spent on education, health and other social sectors, public-private partnership (PPP) is crucial for infrastructure sector," he says. For Mr Nag, the shortage of power and lack of power reforms in the country could play a spoilsport for India story in 2008 and beyond. According to ADB's estimates, India requires $700 to $800 billion of investment in infrastructure in the next five years, which is substantially higher than the estimates made by the Planning Commission. Prof Raj Raina of Gordon Institute of Business Science, University of Pretoria, in South Africa, says that India will keep its growth story in tact for 2008 and beyond. "That India is now determined to build its infrastructure is itself a positive sign. No country in the world will spend so much money in infrastructure for the next five years as India is planning today. I am sure that India will maintain 9% plus GDP growth rate in the years to come," he says. Yes, the spending on infrastructure itself could be a big driver of growth for 2008 and beyond. According to Planning Commission estimates, $145 billion or 30% of the total investment in infrastructure will come from the private sector. The growth of PPP framework in India will enable many infrastructure companies to increase its size and scale in the coming years.
2 comments:
Sadly, market bulls like Jhunjhunwala see only half of the picture -- the monetary side.
While one feels great about the India Growth Story, there is a hidden downside -- a sort of India Death Story, unreported by the media. It is a story of social and environmental costs being quietly passed on by manufacturers, and frankly, society and environment are getting saturated.
An important social principle is violated by many manufacturing activities: While engaged in a profit-making activity, one must not leave a mess behind for the rest of society to clean up.
This principle can easily be understood as common decency. If I come to your house as a salesman in order to market something, I must clean up any mess that I make while selling my product.
But this principle is continually breached by manufacturers and marketers on a large scale in our country, and nobody even thinks of objecting!
Have you ever pondered how mineral water and soft-drink manufacturers who sell their product to you in a PET bottle take no further responsibility what happens to their non-biodegradable bottle? Most often, it ends up as litter in the environment, because the consumer simply does not know what to do with the bottle, other than tossing it away.
This is not how it should be. At the time of conceptualizing and designing the product, the manufacturer has the responsibility of thinking what will happen to the discarded packaging, or, in the case of non-consumables, to the product itself after its use. He must take the responsibility to create a safe avenue for its disposal or recycling.
This requires a mechanism to collect the empty container or used product. So he must set up that mechanism. For instance, the grocery shopkeeper may incentivate the consumer to return PET bopttles to him by initially charging a coupl;e of rupees as deposit for the bottle, which he returns when the consumer returns the bottle to him. These bottles can then be sent back to the company’s recycling facility. (This is how soft-drink bottles made of glass were returned to manufacturers until very recently, remember? We, the consumers, were OK with this system. So why the sudden urge to package everything in discardable materials?)
We should mobilize citizens to demand legislation that every manufacturer must repurchase/collect and recycle as many tonnes of raw material as he uses on a week-by-week basis. For example, if a mineral-water manufacturer uses ten tonnes of plastics per week to manufacture bottles, he MUST buy back ten tonnes of plastic scrap and safely recycle it.
Now think for a moment about used automobiles. Used cars and scooters in India are sold as second-hand vehicles, and then third-hand, fourth-hand. A second-hand vehicle may go from a metropolis to a small town or village. It keeps going further and further into the interiors as it ages, as its condition deteriorates and its market price dwindles. And then?
And then it is sometimes sold to a garage at a throwaway price, and this garage may salvage spare parts from it. ut what remains of this vehicle, including worn-out tyres, may lie around rusting and gathering dust for years and years on some deserted road. The tyres, when they are often burnt in winter for warmth, releasing black, acrid smoke and carcinogenic chemicals into the atmosphere.
Or it lies as a rusting eyesore in some building compound for many years as the last owner loses all motivation to either repair it or sell it.
Thus, every automobile manufacturer sells a product that turns into many hundred tonnes of junk — assorted metal, plastic, glass and rubber junk — after 6-8 years. They end up littering the beautiful countryside with this junk. Is this socially acceptable behaviour?
If one looks for solutions, they are not difficult to find. Legislation and regulations are the answer.
Automobile manufacturers must be required by law to buy back that many tonnes of metals, plastics, glass etc every week, and find ways to recycle them. The cost may be met by raising the market price of their product… but the responsibility to make the recycling activity happen MUST be fixed on the manufacturer of every product.
The same applies to tyres, batteries, plastic goods, newspapers, textiles, chemicals, auto-lubricant oils, etc. The list is long.
It is possible that this will make some manufacturing and marketing processes unviable. If so, this would mean that these economic activities were unviable in the first place, and were sustainable only by passing on hidden costs to the environment, to society and to consumers! Such activities must necessarily come to an end.
Many industrial activities are environmentally and socially subsidized to keep them economically profitable. Let us lobby governments to knock off that subsidy and see how many activities remain sustainable!
I propose peaceful demonstrations to compel industries to self-regulate, and legislators to pass laws:
Small groups of citizens shall collect the branded packaging material of various manufacturers from the environment, and delivering them in large bundles every week to their corporate offices. It belongs to them, right? So let them have it back!
A peaceful demonstration like this, sustained over some weeks, would make a powerful statement. I think this will make a powerful media impact as well… and thereby, an impact on the consciousness of people.
This would be the first step to making changes happen. Citizens, industry and government must first be made to acknowledge that there is a problem; then viable solutions will begin to emerge.
What say, fellow-citizens? I would appreciate your detailed responses to this idea.
Those who wish to join me in peaceful social action (as described) are urged to email me at friendlyghost.kk@gmail.com
Warmly,
Krish
http://friendlyghost.rediffiland.com
http://globalwarming.rediffiland.com
Sadly, market bulls and investors see only half of the picture -- the monetary side.
While one feels great about the India Growth Story, there is a hidden tragedy -- a sort of India Death Story, unreported by the media. It is a story of social and environmental costs being quietly passed on by manufacturers, and frankly, society and environment are getting saturated with junk and toxic wastes.
An important social principle is violated by many manufacturing activities: While engaged in a profit-making activity, one must not leave a mess behind for the rest of society to clean up.
This principle can easily be understood as common decency. If I come to your house as a salesman in order to market something, I must clean up any mess that I make while selling my product.
But this principle is continually breached by manufacturers and marketers on a large scale in our country, and nobody even thinks of objecting!
Have you ever pondered how mineral water and soft-drink manufacturers who sell their product to you in a PET bottle take no further responsibility what happens to their non-biodegradable bottle? Most often, it ends up as litter in the environment, because the consumer simply does not know what to do with the bottle, other than tossing it away.
This is not how it should be. At the time of conceptualizing and designing the product, the manufacturer has the responsibility of thinking what will happen to the discarded packaging, or, in the case of non-consumables, to the product itself after its use. He must take the responsibility to create a safe avenue for its disposal or recycling.
This requires a mechanism to collect the empty container or used product. So he must set up that mechanism. For instance, the grocery shopkeeper may incentivate the consumer to return PET bopttles to him by initially charging a coupl;e of rupees as deposit for the bottle, which he returns when the consumer returns the bottle to him. These bottles can then be sent back to the company’s recycling facility. (This is how soft-drink bottles made of glass were returned to manufacturers until very recently, remember? We, the consumers, were OK with this system. So why the sudden urge to package everything in discardable materials?)
We should mobilize citizens to demand legislation that every manufacturer must repurchase/collect and recycle as many tonnes of raw material as he uses on a week-by-week basis. For example, if a mineral-water manufacturer uses ten tonnes of plastics per week to manufacture bottles, he MUST buy back ten tonnes of plastic scrap and safely recycle it.
Now think for a moment about used automobiles. Used cars and scooters in India are sold as second-hand vehicles, and then third-hand, fourth-hand. A second-hand vehicle may go from a metropolis to a small town or village. It keeps going further and further into the interiors as it ages, as its condition deteriorates and its market price dwindles. And then?
And then it is sometimes sold to a garage at a throwaway price, and this garage may salvage spare parts from it. ut what remains of this vehicle, including worn-out tyres, may lie around rusting and gathering dust for years and years on some deserted road. The tyres, when they are often burnt in winter for warmth, releasing black, acrid smoke and carcinogenic chemicals into the atmosphere.
Or it lies as a rusting eyesore in some building compound for many years as the last owner loses all motivation to either repair it or sell it.
Thus, every automobile manufacturer sells a product that turns into many hundred tonnes of junk — assorted metal, plastic, glass and rubber junk — after 6-8 years. They end up littering the beautiful countryside with this junk. Is this socially acceptable behaviour?
If one looks for solutions, they are not difficult to find. Legislation and regulations are the answer.
Automobile manufacturers must be required by law to buy back that many tonnes of metals, plastics, glass etc every week, and find ways to recycle them. The cost may be met by raising the market price of their product… but the responsibility to make the recycling activity happen MUST be fixed on the manufacturer of every product.
The same applies to tyres, batteries, plastic goods, newspapers, textiles, chemicals, auto-lubricant oils, etc. The list is long.
It is possible that this will make some manufacturing and marketing processes unviable. If so, this would mean that these economic activities were unviable in the first place, and were sustainable only by passing on hidden costs to the environment, to society and to consumers! Such activities must necessarily come to an end.
Many industrial activities are environmentally and socially subsidized to keep them economically profitable. Let us lobby governments to knock off that subsidy and see how many activities remain sustainable!
I propose peaceful demonstrations to compel industries to self-regulate, and legislators to pass laws:
Small groups of citizens shall collect the branded packaging material of various manufacturers from the environment, and delivering them in large bundles every week to their corporate offices. It belongs to them, right? So let them have it back!
A peaceful demonstration like this, sustained over some weeks, would make a powerful statement. I think this will make a powerful media impact as well… and thereby, an impact on the consciousness of people.
This would be the first step to making changes happen. Citizens, industry and government must first be made to acknowledge that there is a problem; then viable solutions will begin to emerge.
What say, fellow-citizens? I would appreciate your detailed responses to this idea.
Those who wish to join me in peaceful social action (as described) are urged to email me at friendlyghost.kk@gmail.com
Warmly,
Krish
http://friendlyghost.rediffiland.com
http://globalwarming.rediffiland.com
Post a Comment