India faces challenges bigger than corruption
In this issue:
» Avoid long-term fixed-income bets in US dollars
» Hotel chains are focusing on reducing debt
» Ninth NELP licensing round displays harsh reality
» Middle East crisis will not spur another crisis
» ...and more!
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Mobius opines that corruption takes place across countries and not just in India and hence he does not think that long term investments would be hampered as a result. In fact, he is of the view that unemployment, inflation and water are the key concerns for India.
To some extent Mobius is right. Corruption in India is not new with many scandals unearthed in the past too. But India has managed to grow at a healthy pace inspite of it. Unemployment, inflation and water are certainly bigger issues that the government has to deal with. For instance, although India's GDP has grown at a brisk pace, it has not necessarily created employment opportunities as the unemployment rate at the end of 2010 was quite high at 10.8%. And for a country which is largely relying on its demographic dividend i.e. its growing working population for growth, surely unemployment will be a big evil that could seriously dent India's prospects.
Inflation has been a problem for some time now and although the central bank is raising rates to bring it under control, it is not likely to entirely solve the problem. Some long term measures are seriously in order like improving agricultural productivity, investments in adequate storage facilities and the like so that there are no supply shortages. Water harvesting is also another area where India should focus on in a bid to reduce dependence on the monsoons and conserve this precious resource.
Having said that, as long as the government is caught up in scams and scandals, there will be less inclination to do any productive work and so the corruption problem in India at least cannot be entirely discounted.
Do you think that inflation, unemployment and water are bigger challenges for India than corruption? Share with us or post your comments on our facebook page.
| 01:24 | Chart of the day | |
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Data Source: The Economist
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Little wonder, even Warren Buffett feels the same way. He has argued that investors should avoid long-term fixed-income bets in US dollars because the currency's purchasing power will decline. "If you ask me if the US dollar is going to hold its purchasing power fully at the level of 2011, 5 years, 10 years or 20 years from now, I would tell you it will not," he is believed to have said. He concluded that he would much rather own businesses. Our view too is not very different.
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Now let's hear what the World Bank President has to say about this. He says that the MENA region turmoil will not trigger another global financial crisis. As a side note, he adds that the impact will be limited to rising oil prices.
Wow! That's such a sweet logic. Rising oil prices don't matter much really. They only fuel inflation. They only undermine corporate profitability and in turn investments. They just deter consumer spending. And they only add to government deficits. That's all that rising oil prices do. The gentleman is so right in pointing out that there is no threat to the global economic "recovery". How we wish everything was so simple!
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| 04:56 | Today's investing mantra |
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27 Responses to "India faces challenges bigger than corruption"
anil
Mar 31, 2011LEGALISE BETTING !!!
NOW---
LEGALISE SCAMS!!!!
VERY VERY EASY !!!!!
SUPREME COURT / PARLIAMENT SHOULD PASS A BILL / AMENDMENT : SUBSTITUTE "SCAMS" FOR "PROJECTS" !!!!!!
JUST IMAGINE :
"RAHUL GANDHI LAUNCHES NREGA SCAM".
"PARLIAMENT CLEARS THE SCAM FOR MODERNISATION OF INDIAN RAILWAYS " .
"PARLIAMENT CLEARS THE SCAM FOR MODERNISATION OF EDEFENCE EQUIPMENTS FOR THE INDIAN ARMY " .
dr shekhar
Mar 31, 2011corruption is not the biggest problem for india till the money is within india.please you are free to disagree with me but just think on it for a moment with your cool.
P.V.Ranganathan
Mar 31, 2011No. Corruption is the biggest problem in India, because that is the cause of unemployment and inflation also, due to diversion of funds meant for public good.
jagdish sanghvi
Mar 30, 2011So far I had more respect for the utterances of Mr. Mobius. But this last one about corruption not the real problem of India, sounds like a very very naive statement of a person absolutely ignorant/untouched by the curse of corruption which has devoured the character of India of Mahatma Gandhi. I am told that in those days, corruption did not exist as people did not know that evil, and people were very nationalistic than today.
To defend corruption in this 5 minute wrap up is quite scandalous. Just see what losses are occurring due to corruption--1.75 lac crore of 2G + 70,000 CR of CWG + lacs of cr due to rotting of the food grains, etc.,etc. All this is in one year. How much money has the nation lost in the last 63 years?? I am sure, hundreds/tens of thousands of billions of Rs. Where did this money come from and went?? Was not this the wealth of the country?? What if we had put all this to work?? Where India could have reached??? It is very shameful/embarrassing when foreigners look at you as one of the most corrupt and spineless people.
I wish that Mr. Mobius and others like him should not make these kind of statements if they have not felt corruption themselves first hand and on a daily basis. Comments like this only go to show that one does not know what kind of curse corruption is and they are bothered about earning truck loads of money, but refuse to see the color of it. Recently, Mr. Warren Buffet also made a similar comment, which was quite painful to read. If he really means that corruption does not matter because America was also corrupt in the 19th and part of 20th century, then why is he always looking for honest management???????? An "Honest Management" is the first maxim of Buffetology. May be M/s. Buffet and Mobius can be given benefit of doubt about their indifferent comments about corruption (possibly due to lack of first hand and widespread experience) and its effect on the economy/GDP.The 5 minute wrap up writer should have known better, because being Indian he must have faced corruption at its best in the country. Please just make a rough estimate how much India has lost and is losing due to corruption--not just in terms of economy/GDP but country's and its citizens wealth, time(years), self respect,employment,poverty etc.,etc. Other problems pointed out by Mr. Mobius are very true and cant be denied.
One thing on the top of my list would be the problem of lack of accountability, eg. Dr. Manmohan Singh and his govt. Just think, accountability in all walks of our lives would solve our so many problems!!!!!!!!!!
Rajeev Chopra
Mar 30, 2011Unemployment water and inflation are not the threat to india but corruption is and we don't need mark mobius to tell us what should be our priority .they have their own agenda and want india to follow them.Indians have to rise themselves to install honest govenment and ensure major overhaul of all government machinery to grow at a rapid pace as per our culture ,climate and temprament.
sivvaraman Iyer
Mar 30, 2011Inflation is like a Man-Eater released from a cage! Difficult to Trap! And Unemployment is like a Pack of hungry Wolves! And Indians are Cricket Maniacs betting Crores!PM says Corruotion does not hurt!
G.P.Sangal
Mar 30, 2011Corruption in India is vast and all pervasive. It eats into the basic fiber of the society. Ordinary citizens, which constitutes majority, are effected badly. Benefits of growth cannot reach the masses unless this menace is tackled. It limits the reach of education, health and numerous other facets.
I am including nepotism, favoritism, compromises based on externous considerations, etc. in the definition of corruption.
p.s.sathyamurthy
Mar 30, 2011Corruption enriches a few and impoverishes the society. It widens the so called 'digital divide'. To twist Churchill's words- 'so much owed by so few to so many.'
Arvind Shende
Mar 29, 2011The problem in India is it's copying US economic systems in India which started way back from 1991 after Narsimha Rao Govt with Manmohan Singh as PM. US has always been encouraging corruption in many ways in all over the world to get business for them, if not by commercial way then through political or military sale & control. On the other hand China has made his own way of economic system, tayler made to the system and people of that country, hence they are able to control over their economy and surge ahead with better economic prospects. India needs to make their own economic model which can suit to Indian population needs. Otherwise India may have better parameters of measurement on economic side but human life will be hell in India which will bring anarchy and many other problems associated with social demands.
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A.K.Chatterjee
Mar 31, 2011Sir
Corruption is the root cause of all other problems.