Month: June 2010

Rich get richer and poor get poorer in India – GDP statistics


On 15th June , i wrote on my blog about the topic ‘ High GDP but low GDP per capita’ is like growth without progress and prosperity . Well, i did not know that 11 days after the blog a report would come out that would validate my analysis . Here is the report

According to the 2009 Asia Pacific wealth report , by Capegemini and Merrill Lynch wealth management , India’s high net worth Individuals ( HWNI’s ) are 120,000 ( 0.01 % ) but their combined net worth is close to one third of the India’s GDP

At the peak of recession ,in 2008, India had 84000 HNWI’s with a combined net worth of $310 billion . To put that figure in perspective , it was just under a third of India’s market capitalization , that is, the total value of all companies listed on the Bombay Stock Exchange – as of end March 2008. The average worth of each HNWI was Rs.16.6 crore .

According to the firm’s 2010 World Wealth Report , India now has 126,700 HNWI’s , an increase of over 50 % over the 2008 number . In 2009 alone , an estimated 13.6 million more people in India became poor or remained in poverty than would have been the case had the 2008 growth rates continued , according to the United Nations Department of Economic and Social Affairs ( UNDESA ). Also, an estimated 33.6 million more people in India became poor or remained in poverty over 2008 and 2009 than would have been poor has the pre-crisis (2004-7 ) growth rates been maintained .

I keep saying that recession or growth that we keep reading in the Times of India or The Economic Times , is only affecting people who read these newspapers. Rest all live under abject poverty .

Read the presentation that i made at the 6th India Innovation Summit on 18th June 2010 at Bangalore . You will see that our demographic dividend is fast becoming demographic disaster !! ( Download the presentation from http://www.rajendra.groupsite.com )

Rajendra Pratap Gupta

Email : office@rajendragupta.in

Dr.Bamboo – Tall & impressive but hollow – Dr.Manmohan Singh


I think , Dr. Manmohan Singh is like a Bamboo . Tall & Impressive in stature , but hollow .

See what he is doing  ? All across, the country is failing but his image continues to be a hit !

China has decided to do a nuclear deal with our Pakistan ! India has failed to check it

America is not as friendly with India , as it is with Pakistan

Inflation is going up and the government is clueless

Naxalites control 1/6th of India

This government is a failed government and BJP is not reining in the government ! I fail to understand why BJP is not addressing the important issues !!

Dr. Manmohan Singh is the Bamboo Prime Minister !! Time to raise voice and get the right issues addressed

Rajendra Pratap Gupta

Email : office@rajendragupta.in

3 G & BWA Auctions – Things could have been done in a better way


Dr.Murli Manohar Joshi

Chairman

Public Accounts Committee

Government of India

6 , Raisena road , New Delhi 110001

Dear Dr.Joshi,

I am sure this finds you fine .It was really nice talking to you yesterday. I wish to submit the following for your kind consideration

Recently , the government has raised Rs. 1.06 Lac Crore from the 3 G & BWA auctions. Though it is a different issue that the government was expecting a modest Rs. 32000.00 Crore from the auction ! The following should be considered

  1. What was the basis of the government’s projections ? Was it a failure on the part of the government that the proceeds of the auctions exceeded by 3 times of the projections from the government ?  This clearly gives a reason to believe that there was a systemic failure on the part of the government and it shows up in government’s failure to arrest price rise ( inflation )
  2. Was the spectrum auction and sale the best option ?
  3. If the government went for a zero price or nominal booking price,  and allotted spectrum for the entire India as one circle with say a 25 % – 30 % of the recurring revenue share from the telecom providers, would it not be better in serving the interest of the government in the long term ? It would have eventually generated much higher return per year and every year rather than one a time high auction fee ! What was the basis of deciding one time auction fee with an expected collection of Rs.32000 crore ?  This money ( Rs.1.06 lac crore ) might give temporary sound bites to Pranab Da ( and the PM ) for no efforts of his or Mr. Raja . But the fact is that , it will put a strain on the telecom companies and will also suck the liquidity from the markets . This will also cause a long term loss to the government as it could have gained immensely , had it gone for a lower or zero initial fee and a larger share in the recurrent revenue from the telecom providers. This is a myopic policy of this government and a big loss to the exchequer
  4. What was the total loss in previous auctions done in arbitrary allocation of telecom spectrum, and what is the progress in the CBI investigation ? Why has the FIR lodged by the CBI not named anyone ? When the senior most minister or the bureaucrat should be named in the FIR , what has prompted the CBI to lodge the FIR against unnamed persons ?
  5. Since Rs.10.6 Lac Crore is already raised through the auctions, i suggest that the government allocates the 10 % the money raised in India Innovation and Entrepreneurship fund to promote innovation and entrepreneurship amongst youth of the nation

I am sure you will take up these matters in appropriate forums . We look at your leadership in addressing some important issues concerning the nation .

With best regards

Rajendra

Rajendra Pratap Gupta

Email: office@rajendragupta.in

Office.rajendra@gmail.com

High GDP but low GDP per capita – Time to give a public explanation – the Congress and the Opposition


If we see , India’s GDP is growing but the majority of the population is not prospering . Why ??

Let us consider this

The quarterly growth report card shows that Mining and Manufacturing contributed between 18-22 % of the GDP  in the Q 1 , 2010 numbers released last week.( Remember mining is concentrated in a few government PSU’s or some mining barons like Reddy’s of Karnataka etc )

Exports are roughly 13  % of the GDP

Agriculture contributes 20 % of the GDP  ( Supporting 60 + % of the population )

My view is that,  the decline in agriculture & growth in mining can be related directly to the growth of Naxalism , as one creates a naxalites and the other nurtures it !!

Rate of growth of yields per unit area in Agriculture  has fallen in:

Food grains from 3.39 % in 1992-93 to 1.39 % in 2001-02

Non-Food grains from 3.19 % to -0.57 %

According to the Economic survey between 1980-81- 2001-02 the capital formation in agriculture has fallen from 3.4 % to 1.3 %

FDI in Agriculture was never encouraged or focussed – Announcements does not matter Dr. Manmohan Singh ji ?

Between 2002-08, population growth has been 1.4 %  and the labour force has been growing at 1.9 %

According to the World Bank Development report

Between 1988 to 2008( 20 years ) as a percentage of GDP the :

Agriculture sector decreased from 30.5 % to 17.3 , whereas 65 % of the population depends on agriculture

Industry grew from 26.2 % to 28.8 % ( Population & people employable has been growing faster )

Manufacturing decreased from 16.2 % to 15.1 %

Services increased from 43.4 % to 54.6 % ( Private sector contributed to this )

Household final consumption expenditure decreased from 65.8 % to 54.1 %

Imports of goods and services increased  from 7.5 % to 28 %

Yesterday , in the Times of India , the Finance Ministry’s chief Economic Advisor said that GDP growth of 8.9 % in the Q 1 of 2010-11 was due to robust growth in capital goods and consumer good production

Does it not look like some Middle eastern countries , where the GDP is very high but GDP per capita is less,  as the high GDP is due to mineral oil wealth , and low GDP per capita is due to the fact that the oil wells are in the hands of a few royal families !! In India , Mining , Exports and trade is in a few hands and the focus , incentive and investment is maximum from the government !! For Agriculture , we all do not depend on the government but on the Rain Gods !!

BJP must act as a responsible opposition . The current state of affairs is not just a failure of the ruling front,  but of the entire opposition . Public demands an explanation from both !

What is government doing ? Bhopal Gas tragedy GOM’s is just an issue to divert the attention from real burning concerns of the public

Politicians are addressing 90 % urgent matters and 10 % important matters.

Time to act responsibly and explain or else both Congress and the opposition would be damned in the next election

Rajendra Pratap Gupta

Email: office@rajendragupta.in