Engines of Growth

1
Engines of Growth Development

• By
• Dr T.H. CHOWDARY
• Director Center for Telecom Management and
  Studies
• Chairman Pragna Bharati (intellect India )
• Former Chairman Managing Director
• Videsh Sanchar Nigam Limited
• Information Technology Advisor,
• Government of Andhra Pradesh
• T 91(40) 6667-1191/ 2784-6137(O) 2784-3121
• F 91 (40) 6667-1111, 2789-6103
• hanuman.chowdary_at_tcs.com
• thc_at_satyam.com
• Talk _at_ Osmania University, Hyderabad 16
  April 2008

2
Development

• Economic
• Family Income
• Old Age Pensions
• Insurance
• Life, Health, Work
• Human
• Health
• Longevity
• Education
• Quality of Life ( air, water, leisure,
  communion)
• Stable Family
• Stress

3
Key Components of Human Development
Material Well-Being
Income Assets Employment
Knowledge
Longevity
Literacy Schooling Higher Education
Mortality Nutrition Health Care
4
Building Blocks of the Development Process
Enlightenment
Enrichment
Enhancement
Empowerment
5
Linkages Between Economic Growth Human
Development
6
Growth Measures(1)

• Rates of GDP PCI growth
• Food, calories proteins
• Health Disease Death rates Doctors
• Literacy, Education (graduates, ST RD
• Electricity consumed
• Telecoms
• Motor vehicles
• Housing

7
Growth Measures(2)

• Trade
• Foreign Exchange Resources
• Tourism
• Roads, Railways, Ports (sea air)

8
Ancient Engines of Growth of Wealth

• Conquest loot (Greek, Persian, Roman, Egyptian,
  Arab, Mongol (i/c Mogul), European imperial/
  Colonial conquests
• All these which depended on force died/ dying
  (US)
• Empires of the future will be those of the
  mind (ie intellect).
• Winston Churchill

9
Fuel for Modern Engines of Growth

• Education
• ST
• Knowledge Creation RD
• Health
• Human Resources ( can overcome lack of natural
  resources. Eg Singapore, Israel, Japan)

10
Prosperity Poverty
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Per Capita Income (PCI)
Developing Countries Developing Countries Developed Countries Developed Countries
Country PCI Country PCI
Korea 17,930 USA 37,500
Mauritius 11,260 Ireland 30,450
Malaysia 8,940 Japan 28,620
Brazil 7,480 Netherlands 28,600
Thailand 7,450 UK 27,650
China 4,900 Germany 27,460
Sri Lanka 3,730 France 27,460
Indonesia 3,210 Singapore 24,180
India 2,880 Israel 19,200
12
Growth of GDP Population Per Capita Income
(PCI) Years for doubling PCI
Period GDP POP PCI YRS
1951 to 2000 3.5 2.8 0.7 70
2004-07 9.0 1.8 7.2 10
13
Poverty Ratio in Selected States (1)
Contd.
14
Poverty Ratio in Selected States(2)
15
Content of GDP(Figs. in )
In the year 2006
16
The Rising Cost of SustenancePrices for various
food staples(in US per ton)
Source TIME, March 31, 2008)
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Engines of Growth(1)

• UK and other Western European States Industry,
  Rail roads
• USA
• Rail Roads
• Automobiles
• Interstate Highways
• Electronics Computers
• Defence industries
• ST (Nuclear, pace, missiles)
• Japan
• Automobiles
• Consumer Electronics
• Semiconductors
• Ship building
• Robots

18
Engines of Growth(2)

• Korea
• Electronics
• Automobiles
• Ship-building
• Construction
• China
• Highways
• Railways
• Dams Canals
• Telecoms
• Industries (from small to sophisticated machines)
• Electrics
• Machines
• Construction (buildings, ports)
• Defence Industries
• Iron Steel, Cement

19
Engines of Growth(3)

• India
• What are what could be
• I.T Software
• Pharmaceuticals
• RD ( for other nations)
• Highways
• Construction (Housing, offices)

20
What slow down or brake our engines of growth

• Governments permit-licence-quota
• Corruption
• Welfare before work
• Competitive populism
• Personality cult in political parties
  (proprietarisation)
• Poor education
• Poor Nutrition
• Ignoble leadership

21
Post-USSR engines for Development (1)

• Winding down government /state capitalism
• Liberalisation, privatisation competition (eg
  telecoms/ air travel, personal finance,
  automobiles)

22
Post-USSR engines for Development (2)

• Flow of capital/enterprises
• PPP- projects
• Privatisation of Higher Education (Talent
  creating A P, TN, KN, MH) and now all stages of
  education.
• Competition between PSUs privates

23
Affordability of Electronic DevicesRatio of
Price of Device to Per Capita Income
1951 1974 1994 2007
Radio 2.0 0.5 0.02 0.005
TV Set NA 1.9 1.2 0.37
Years Telephone Service 2.5 1.0 1.0 0.12
PC NA NA 6.0 0.75
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What we should not do

• You cannot bring about prosperity by
  discouraging thrift.
• You cannot strengthen the weak by weakening the
  strong.
• You cannot help the poor by destroying the rich.
• You cannot establish sound security on borrowed
  money.
• You cannot keep out trouble by spending more than
  you earn.
• You cannot build character and courage
• by taking away mans initiative and
  independence.
• You cannot help men permanently by doing for them
• What they could do for themselves.
• - Abraham Lincoln
• (Source Freedom First, May 1989)

25
DhanyawadThank You
26
Subsidies (Central) in crores of Rs.
Year 2004-05 06 07 08 09
Total 45,957 47,522 57,125 69,742 71,431
Of which food 25,798 23,077 24,014 31,546 32,667
Education (Rs. crores) Education (Rs. crores) Education (Rs. crores) Education (Rs. crores) Education (Rs. crores) Education (Rs. crores)
Total Py Sy High
34,400 19,777 4,554 10,853
Health 2006-07 08 09
11,366 14,500 16,968
27
Budgets of the Union Government
Year 2006-07 2007-08 2008-09
Revenue 4,34,387 5,25,098 6,02,935
Capital 1,49,000 1,84,275 1,47,949
Total Income 5,83,387 7,09,373 7,50,884
Non-plan 4,13,527 5,01,849 5,07,498
Plan 1,69,860 2,07,524 2,43,386
Total Expenses 5,83,387 7,09,373 7,50,884
Rev. Deficit 80,222 63,488 55,184
Fiscal Deficit 1,42,573 1,43,653 1,33,287