|»5 Minute Wrap Up by Equitymaster|
On This Day - 20 AUGUST 2010
India's public enemy No. 1
In this issue:
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It is a monster that has made a habit out of rearing its ugly head time and again. And it seems to especially make an appearance when we as a nation set any substantial target for ourselves.
Just two recent examples are enough drive home the point.
At the outset, Prime Minister Manmohan Singh said that India hosting the Commonwealth Games (CWG) would "signal to the world that India is rapidly marching ahead with confidence." When the organizers of the CWG recently called a press meet to talk about how prepared New Delhi was, it ended up instead fielding questions about how much they paid for toilet paper. The only signals the CWG have ended up sending out are that of mass corruption and mismanagement.
A while back, transport minister Kamal Nath set the ambitious target of building 20 km of highways in the country everyday. That intended pace has now come to a screeching halt. Why? No prizes for guessing. The CBI unearthed a scam in highway tendering in May. Since then, the authority has managed to award merely 2 projects spanning just 164 km. This roughly works out to a pace of just 2 to 3 kms per day. Dismal by any count.
Till when will the monster of corruption keep playing havoc with our dreams? And just why is corruption so very deep-seated in our country?
Age calculated from the year of incorporation
What was most interesting was the fact that China despite its economic prowess is an insecure nation. Its growing aged population and anti-Communist sentiments are seen as a major threat. India's democracy and young populace, in particular, scare the dragon nation. But we could not agree more with the conclusion of the article. That both India and China would be better off channelizing their resources together rather than competing with each other.
As far as the Indian middle class is concerned, ADB believes that it remains vulnerable to global economic shocks. This is given that over 75% of the country's middle class remains in the US$ 2-4 daily consumption bracket. As such, this segment is at risk of falling back into poverty in case a major economic crisis strikes.
We see India's rising middle class as both an opportunity and a risk. Opportunity in light of the huge consumption boom it promises. And risk in terms of the big unemployment challenge it can throw up.
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