the lost logbook

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India vs China – A Bird’s Eye View

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Recently I can across this amazing blog post by Mr Sujai Karampuri, CEO, Sloka Telecom (It’s an Indian startup in the telecom sector). It is one of the new breed of companies in India Inc who actually innovate and not provide services to the west.

His post addresses an answer to one of the most common topic these days,

India is rising, India will be a superpower in the next 10 years, west is going down, India has an edge over China with it’s English speaking people etc.

But is India actually in a position to take over the west? Can it manage to transfer the center of gravity of the worlds largest companies (Like MSFT, CISCO, IBM) to India and itself start new ones?! I don’t think so with our corrupt politicians, lack on innovation, the great caste system, internal security, the education system and lack of infrastructure to name a few! Mr Sujai’s post details this case study in his blog, I will take some excerpts from his blog:

In reality China is leaving India behind by a bigger margin every year.


Chinese have built the biggest dam on the planet, built the longest bridges, built the fastest cities, built their own planes, submarines, ships, magnetic trains, and even the highest railways while India continued to lay another layer of asphalt on its decrepit roads after each rainfall.

India is not even showing a promise of catching up, It is still content to play a small game.

Is English really India’s edge? – how come their lack of good English not stop Huawei from becoming world #2 in telecom equipment?, How come it did not stop Lenovo, Haier and ZTE from becoming leading global brands? Just to give a perspective to Indian readers – 2 telecom equipment companies of China, Huawei and ZTE put together made USD 30 Billion in 2008 while the entire IT-ITES industry of India put together made USD 58 Billion in 2008-09.

Indians are in self-denial. They foolishly believe everything Thomas Friedman tells them, and they are happy serving their European and American masters setting up BPOs, KPOs, LPOs, software services, helping them do their things in a cheap and cost-effective way, “I am an Indian. I am good at services. I should just stick to it”.

China is even popularizing entrepreneurship as a cultural attitude with various initiatives including TV programs. Infosys, TCS and Wipro, the giants of Indian software services which the Thomas Friedman lauds, did not do much to sponsor or promote startups in India (barring few exceptions).


Here are some comparisons:

GDP: India has around $1.209 trillion and China around $7.8 trillion.

GDP growth: China grew by 9.1% where as India by 6.7%.

Per capita GDP: People say, more population means less per capita GDP, but China is even more populous than India! India has a Per capita GPD of $1016 where as China has $6,100. That’s a big difference and something to worry about!

Inflation: India’s inflation is 7.8 % where as China’s in in negative, -1.2 %

Labor Force: The difference is population is not much! India has 523.5 million where has China has 807.7 million

Unemployment rate: India: 6.8 % and China: 4.3 %

So, as we see, the Chinese economy has seen some radical development and has grown significantly, where as India has been pretty slow. As Mr. Gurcharan Das puts in his book India Unbound,India will never be a tiger after 1991, it is an elephant who has begun to lumber and move ahead.“.

But is the lumbering good enough?!

Ok, so, what does all that mean? We need a solution right? Here are some for  starters:

  1. Provide quality education, which stresses more on the learning than getting good grades! (Remember 3 Idiots, the movie?). If we will have our next generation well educated (not just knowing how to write their names), we will solve some of the problems in India, which we tend to ignore, but the biggest evils in the Indian society  like the caste system – what ever it preaches, it just wrong and not at all justified! The divide on the basis of cast, color, religion, region, skilled people which can look beyond the BPOs and KPOs.
  2. Overhauling the Political System in India, I believe, this is the key to India’s growth. We really need to re-check the way our politicians run this country, it seems impossible, but its a dire requirement. Corruption has plagued the Indian society and presently there is no mechanism to correct it.
  3. Dignity of Labor

This list could go on and on! But who will implement these solutions?

As Mahatma Gandhi said

You must be the change you want to see in the world.

It’s You…..

UPDATE

India’s voice BPO segment falling silent

China can overtake US economy by 2020, says PriceWaterhouseCoopers

India’s voice BPO segment falling silent

Written by Utkarsh

January 19th, 2010 at 7:56 am

Posted in India,Start Up

Tagged with ,

5 Responses to 'India vs China – A Bird’s Eye View'

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  1. India vs China – A Bird's Eye View http://bit.ly/4wd8yu

    Utkarsh Sengar

    19 Jan 10 at 8:00 am

  2. […] full post on the lost logbook @import […]

  3. Beijing most significantly counted on massive credit growth to spur the economy. The amount of new loans made in 2009 nearly doubled from the year before to $1.4 trillion – representing almost 30% of GDP. The stimulus plan worked wonders, holding up growth even as China’s exports dropped 16% in 2009.
    But now China is facing the consequences of its largesse. Fears are rising that Beijing’s easy-money policies have fueled a potential property-price bubble. According to government data, average real estate prices in Chinese cities jumped 7.8% in December from a year earlier — the fastest increase in 18 months. The credit boom has also sparked worries about the nation’s banking system. Many economists expect the large surge in credit to lead to a growing number of nonperforming loans (NPLs). In a November report, UBS economist Wang Tao calculates that if 20% of all new lending in 2009 and 10% of the amount in 2010 goes bad over the next three to five years, the total amount of NPLs from China’s stimulus program would reach $400 billion, or roughly 8% of GDP.
    India, meanwhile, isn’t experiencing nearly the same degree of fallout from its recession-fighting methods. The government used the same tools as every other to support growth when the financial crisis hit – cutting interest rates, offering tax breaks and increasing fiscal spending – but the scale was smaller than in China. Goldman Sachs estimates that India’s government stimulus will total $36 billion this fiscal year, or only 3% of GDP. By comparison, China’s two-year, $585 billion package is roughly twice as large, at about 6% of GDP per year. Most important, India managed to achieve its substantial growth without putting its banking sector at risk. In fact, India’s banks have remained quite conservative through the downturn, especially compared with Chinese lenders.

    I think this should probably give u little hopes about india’s future…yes china has an edge in certain sectors..but u cant deny india’s strength like pharmaceuticals etc..

    AD

    25 May 10 at 7:12 am

  4. India is definitely a “power”, but an untapped power. As I said, “it’s an elephant”, so, I am waiting for my elephant to take longer and bolder strides forward.

    Utkarsh

    27 May 10 at 9:08 pm

  5. […] article here: […]

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