[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]

Well: this is the answer



PRE-DEBATE
==========

Well, here are the answers. For some reason, the Excel spreadsheet on
which this was prepared is not transfering over proprely and hence you
cannot tinker with these results. I will try to see how this can be
overcome, but actually, you can recreate these results in virtually 10-15
minutes if you like. 

USA = 100, INDIA = 5, TODAY						

WHERE THE USA WILL BE GIVEN THE VARIOUS ASSUMPTIONS OF ITS GROWTH RATES						
	50	100	150	200	250	
1.5	211	443	933	1964	4135	
2	269	724	1950	5248	14127	
2.5	344	1181	4061	13956	47970	
3	438	1922	8425	36936	161922	

PLUG IN THE GROWTH RATE YOU NEED TO CROSS OVER THE ABOVE PER CAPITA						
	50	100	150	200	250	
1.5	7.8	4.6	3.6	3	2.7	
2	8.3	5.1	4.1	3.5	3.2	
2.5	8.8	5.6	4.6	4	3.7	
3	9.4	6.1	5.1	4.5	4.2	
	 	 				
THIS IS THE FORUMALA THAT GIVES THE PER CAPITA OF INDIA GIVEN ABOVE GROWTH
RATES					
	50	100	150	200	250
1.5	214	449	1007	1847	3905
2	269	723	2073	4865	13149
2.5	339	1162	4253	12754	44021
3	447	1864	8697	33283	146521

The fundamental lesson to be learnt is that if we could do 9.4% p.a. we
could catch up with the USA in ONLY 50 YEARS, even if it were growing at
3% p.a. 

That is out of the world, however, a gr. rate of 9.4% for 50 years. Also,
the USA will be unable to grow at more than 2.5% p.a. for the next 50 yrs.

Therefore the target gr. rate for India, for a catch up with USA in 100
yrs, if it grows at 2.5%, is 5.6%.

Once more, economic theory and practice tells us that rate is
unsustainable for 100 years at a stretch. What can be done is to target
very high gr. rates initially, at over 10% for about 20 yrs, and then the
economy will in any case slow down, tapering off in the end to about 2%
p.a.

Of course if we continue at the Socialist Growth Rate of 1.7% p.a.  which
we had since independence, even for another 100000 years also, we will
never never catch up.

Today, the technology (institutional framework) needed to achieve this
catch up is available with Economic science. We know that we have to set
up minimally regulated markets, and encourage free enterprise, trade, and
competition. We have to Banish Bureaucracy (by the way, that is the title
of an excellent book that has recently come out). 

The question is essentially only one: who is going to bell the cat? It is
in my self-interest and in your self-interest to only look after our own
families. So, who is going to do the hard work required to reform the
brilliant, but confused, Indian mind?

Who is going to tell the people of India that this is not a fool's fantasy
- the catch up with USA, but a sheer inevitability, if we follow the
lessons learnt in Economics over the past 250 years. 

What is needed is political entrepreneurship of an unparalleled scale and
magnitude.

We don't want lazy people on this list whose only job is to check up some
of this mail and to delete it randomly.

We want people who will actively solicit new members for Indiapolicy, and
actively engage in debate with everyone they meet.

You are needed to participate in the Task Forces, and in the Action
Plan.

I challenge each of you to contribute some of your spare time in promoting
this effort. As Dharmendra would say, '....'

SS