India would have been the largest economy in the world by now if

The founder of modern Singapore, Lee Kuan Yew, realised, at the very start that he needed to root out corruption if he wanted his small country, which had not been blessed, as India is, with natural resources, to prosper.



Today, Singapore ranks number three in the World Bank’s ranking of richest countries by per capita income and number seven in Transparency International’s Corruption Perception Index. God, in His infinite wisdom, gives countries advantages and disadvantages. He deprived Singapore of many natural resources, but gave it good leadership. He gave India lots of natural resources, an intelligent people, but a lousy polity. (Ah well, the electorate must also share the blame for that). Had India’s priority, when it achieved independence, also been to root out corruption, India, given its other advantages, would have had a higher per capita income than Singapore’s $82,763, instead of the paltry $5,418 (Purchasing Power Parity basis). That would make India the world’s largest economy.



Corruption hurts



On Transparency International’s Corruption Perception Index, India is ranked 85th. Singapore is seven. There is an inverse correlation between corruption and economic betterment of people.



Despite all the evidence, Indian political leaders still have not learnt that rooting out corruption is one of the main planks to propel a country’s economic development. By its very nature, corruption preserves the status quo, providing benefits to a select group of people, and protecting them from paying for their follies — thus denying advancement through merit, which is the sine qua non of a vibrant and successful economy.



No less a person than RBI Governor Raghuram Rajan has stated in an interview that ‘no one wants to go after the rich and well-connected wrongdoer’. He is absolutely spot on. Nothing happens in well-known scam cases, even with mounting evidence of fraud.



Can we then aspire for India to be a rich country, unless we are willing and able to root out corruption?



Investors, domestic and foreign, need to feel confident of the legal system being able to protect their rights. In the period January 1-18, foreign institutional investors have been net sellers of Indian equity totalling ₹9,446 crore. Doubtless this was due to worries over China, and over the sharp drop in prices of crude oil, which has fallen below $ 30/barrel from a peak of $140, and of commodities.



The fall in commodity prices has ground trade in bulk commodities virtually to a halt. So much so that it is now cheaper to rent a 1,100 foot container ship than a Ferrari; perhaps the Monk who sold his Ferrari would have done better renting it out!



Crude oil prices are unlikely to rise higher after sanctions on Iran were lifted, which will add to supply. Low oil prices are severely straining the finances of OPEC countries, and of countries like Russia and Venezuela dependent on it.



OPEC countries used to be providers of capital to global markets when prices were high. They are now borrowers from global capital markets. So, capital will not only be scarcer, but will also become more expensive, now that the US interest rate cycle is rising. These factors are affecting, and will continue, to affect stocks.



For example, China had, using cheap money, provided under quantitative easing programmes, built up excess supply of various things, including steel. Now that its economy is slowing down, it is dumping the excess steel in world markets.



The world’s largest steel maker, Arcelor Mittal, is bearing the brunt of this dumping; its market cap has fallen 95 per cent from its peak.



What next?



Technically, the market seems to have fallen enough and is poised for a rally, which began on Friday. The long-term India story remains good, especially when compared with the plight of other countries. A lot of things need to be done to achieve our potential, and the government has good intentions. It is trying to find ways to provide jobs, and its initiatives to help start-ups is a great way to do so and ought to have been done decades ago.



We need to, however, urgently fix corruption and a judicial system that moves far too slow to be effective. Without this, India would be an ‘also ran’.

 

friends share your thoughts

 

very well written, friend, you sound like a pro!

However, I still do not see things moving on the people part because "we are like that only." Jump a signal and settle it rather than pay fine or it's just about who you know. This is the most simplest example that I can cite. Private enterprises aren't corruption free either.

 

easier said than done.....specially with our mindset of bribery!

 

Transparency International’s Corruption Perception Index - 2014 Ranking. India 85 and China 100

GDP of China is 5 - 5.5 times more than India at nominal terms

In 1980, size of economy of China and India was $309bln and $181 bln respectively.

Today China stands at $11.5trillion to India $ 2.3trillion

Worst case ( from India's perspective) two equally corrupt perceived countries, India probably better blessed ( by God) in terms of natural resources and human intelligence but yet this huge gap in their GDP's.

Any ideas on the causes?

 

Democracy is a tool to use by well educated ,learned and responsible Society. Even in west voting rights were started with most desrving and slowly it were given down the order with maturaty and understanding by rest of sections But our leaders at the time of independence gifted this to all.So those who are not mature may be working as speed breaker to our system unknowingly resulting in populist and deleying politics .Also our another form of corruption, caste based corruption may not have been considered as it being unique to India which start from voting itself and not better to explain it further to stay out of controversy and keep this form out from political debate.

 

@kharb from here , we can expect better conditions compared to past . democracy is a blessing for us when compared to china. as we all know , slow and steady wins the race . India is on this route. china wants faster growth at huge expense, which will make china tired and fatigued in the long run. China is really bigger than india in real gdp but condition in china is worse than in india. unemployment, asset bubble, corruption, public debt crisis, over capacity, currency wars, lack of transparency, government intervention in every thing. these are problems faced by china that will take a big hit on their economy in long run. and india is getting better in these factors slowly.

 

The limited point I wanted to bring out and it seems to be emerging from others too is that- its not only corruption that hinders economic growh and becoming an economic powerhouse ( china has achieved the status of an economic powerhouse despite being probably more corrupt than India) and thus only a corruption free India since independence would not have guaranteed India becoming the largest economy. Anyways lets live in reality and which is India is probably decades away to becoming that.

Way to go India and we , with our money bags from riding on our ongoing economic boom, on the way to our banks.

 

the only reason i think for the situation india today is corruption. Corruption at state level is huge and bigger and beyond what we can think. nothing can be done. but these are facts.

 

Time for some english lessons : Fact (n) : a thing that is proved to be true. So example of a fact is : we Indians are thoughly corrupt. And ' india is not the largest economy only because we are throughly corrupt' hopefully J Mulraj has irrefutable proof to back this up.. Unfortunately even the most inventive journalism peters out without facts

Anyways enough said by me on this topic/thread.... For, ( as in the words of Robert Frost)

The woods are lovely, dark and deep.
But I have promises to keep,
And miles to go before I sleep,
And miles to go before I sleep.

 

cause is

cause is india is le lo economy and china is de do economy.

 

Indian Economy is big , but in my view " Per capital Income " is very low , that is
country's real strength ....

 

yes sir, india's per capita income is 1600$ while china is 7200$ . unmanagabily huge population is a threat that will deplete all resources of the country. on top of this indias wealth inequality is biggest in the world . top 1% holds 58 % of the total wealth of india .and balance 99% holds 42% of total wealth. that is simply devastating.both these factors combined is very alarming for the health of economy is concerned.

 

yes , but " top 1% holds 58 % of the total wealth of india " ....it is wrong in my view , because " land , houses , gold , money , shares value is huge in the hands of ordinary persons , total indian market cap is approx 110 trillion rupees in that promoters share approx 50 % in that i am agree with this point , but remaining houses , gold , cash , land values are more than that , people simply deposit 14 lakh crores cash in bank for demonetization effect , so total wealth is not in the hands of 1 % people ....
indian drawbacks are " political correction " , un education , huge population 130 cr. , "

 

but sir our per capita annual real income is just 1600$ / 1,04,000 Rs(284rs per day).From this indicator we can calculate the wealth of india as a whole country and its aggregate living standards.atleast 35 crore out of 130 crore people are extreme poor. ie, without adequate food , cloth, shelter. so there is undoubtedly huge concentration of wealth. rich getting richer and poor becomes poorer.alarming situation.

 

India's per capita income to cross Rs 1 lakh in FY17

source :
https://economictimes.indiatimes.co...ss-rs-1-lakh-in-fy17/articleshow/51486686.cms

 

Really appreciate the thoughts and intention to share views on this topic. My personal view is that most of the transactions at micro level are not mesurable in Indian Economy and hence the GDP figures may be prediction with variance of 30-40%. This is most apparent from the fact of tax base of India which is hardly 2.9%. As regards China, don't have any comment on it and hence I found difficult to comment on comparison of Indian and China. But the GDP data of India is to be made on scintific basis so as to accurately include the Unorganised Transactions also.