India of Tomorrow: Economic progress in real sense

India of Tomorrow: Economic progress in real sense: My driver, who has been with us for past ten years or so, lives in a chawl very close to our house. His house and his locality is an abso...

Economic progress in real sense

My driver, who has been with us for past ten years or so, lives in a chawl very close to our house. His house and his locality is an absolute sanitation disaster. I am certain any of us who would be reading this blog would not like to visit such a place apart from trying to gain ‘insights’ on where most of the “India” lives!

I was shocked when he told me that his barely one-room house is now likely to fetch him Rs. 15 lakhs! Some builder is eyeing their chawl for redevelopment!

In 2001, we bought a house in a good housing society, built by a builder of repute, meant for white collared people like us. We got this 4 room house for around Rs. 16 lakhs.

In Mumbai, the standard of living has not gone up in the last 10 yrs. In fact, far from it. There is no improvement in access to cleaner air, water, roads and transport, and recreation. It has become increasingly more difficult to travel within the city; hence visiting friends and relatives has also become an ordeal and is now treated as a major activity on weekends.

In the last 10 yrs. or so we have chased the housing prices up; that has become our satisfaction driver. The land that can be used to build wider roads is today more valuable if a housing society is built on it.

I am not the one who is against those who have invested in real estate market, with the hope to make risk adjusted returns in a real sense. In fact, I am one of them too. The question is should the returns be in terms of capital appreciation or should the returns be income generated by sweating the assets.

I think one can still make returns on investments in real estate but perhaps with a different mix. If the situation turns out to be that, people rent a house and get 8-10% return in terms of rent income and 2-4% returns on capital investment, everyone would be as happy, instead of the reverse situation which exists today.

I believe if we reach that kind of return mix, more money will flow into infra bonds and those investments which would lead to better infrastructure.

If we are able to create a situation where these investments are channelled to infrastructure and industries,  with an objective to create a social infra structure where every Indian has increasingly better life in terms of access to basic needs, shelter, education, sanitation, medical facilities and recreation, then we all will be better tomorrow than we are today.

I would have been very happy if my driver would have said that he was buying a similar house that I had bought 10 yrs ago! That would have been economic progress and prosperity in the real sense.

All of us are responsible to make the change happen. I am hopeful that it will happen! As things develop and change around us, we all need to have a view and opinion on what is the desired direction..

India of Tomorrow: Economic model the world should follow

India of Tomorrow: Economic model the world should follow: As you sit back and try to enjoy the markets you realise that investors both foreign and Indian are optimistic on the internal consumption s...

Economic model the world should follow

As you sit back and try to enjoy the markets you realise that investors both foreign and Indian are optimistic on the internal consumption story.

It looks like they are very happy and in awe of India and the growth India is achieving, without making investments in infrastructure and basic development. This is a model the world would like to adopt and implement. I believe, it will be a solution for all that ails the western world. You don’t need to have deficit spending to stimulate growth..

India is a perpetual machine. It does not need to be fed with any investment, development and planning. We in India don’t need roads and electricity. We don’t need to add more schools and don’t need to have sanitation and drinking water supply conditions to improve.

This is an engine which is throwing up incremental growth without requiring any incremental investments. It does not require you to do many things, hoping some of them would click.  It does not demand fine tuning of strategies and execution.

We surely are living in a golden era.

Obama can definitely win the next elections if he spends a couple of months in India and if he is able to grasp and accept that that the best thing to do, is to do nothing. Even better is to screw up things and the reverse momentum kicks in.

I cracked this, when I was observing the Indian and foreign investors behaviour in the current markets. I felt enlightened, and hence now I am enjoying it.

Investors think that Indians will eat more, may be many more Dominos Pizzas tomorrow and more of them will drive in cars and shop at Shoppers Stop and more frequently buy Bata Shoes. Private schools would do better. Investors may lose their shirt in the markets but they won’t forget to wear Jockey!

The investors are also convinced that India does not need to build roads, electricity plants, sanitation systems and ports. If they try to do so the economy would take the colour of the Western world or China and would get into recession. Most of these companies hence are available for asset stripping. These companies better not be there tomorrow. They would require and unnecessary government subsidy or a bailout.

As the commentators say, there are demographic dividends for tomorrow coming in from internal consumption multi baggers.

This ride, we will have to take in a helicopter. There are no hairpin turns, there are no bumpy roads either... hell, there are no roads!

What will happen when the BPO kids turn 35?

This is the question which keeps troubling me. Does it trouble you?

When I go to the Inorbit Mall in Malad and see these young kids I wonder what they would do 12-15 yrs from today? What kind of work would be available for them as they grow up both in career terms and by age.

I also wonder whether an eco system exists which can keep paying incremental wages? Would these millions of young hard working people have an opportunity to make a meaningful and positive contribution to the organisation they work in.

How many of them would like to be on the other side of the telephone line answering calls or answering emails at age 35. How many of them would be economically viable and positive contributors? What higher order jobs can they do? Would they be available in plenty? Would they get and would their be jobs available for them in the domestic markets?

So how would the India of tomorrow be? How big would this industry be 10-15 yrs from now. What kind of work would it be doing?

What would be the career progression for this BPO generation? Will it create a richer India or we will have social problems tomorrow?