Ankit Kumar, Liberal who accomodates all view points even conservative ones.
India should let the market forces decide what is the ideal path. Governments should stop wasting money on deciding where to invest. Any country which tries to run its economy on one engine is bound to fail. India should let markets to determine what is the need of hour. "Make in India" is a good concept but government should really do something about it. Till now it has been only talks no concrete steps. Give the power in the hands of people and they will definitely develop themselves. We have been growing way below potential because governments are deciding for people where to invest and how much to invest. India has not taken that much advantage of globalization that it should have. It is very naive to say that export or consumption can grow Indian economy. Economies grow only because of productivity growth of their citizens. India should focus on productivity growth and let the markets take care of rest
Kishor Shah, Common Man
India has to attend the growth issue from both the ends. Export oriented growth is vulnerable with political surrounding and consumption oriented growth is dependent on govt ability to pump money at the bottom of the society.
The political atmosphere, these days, is highly unpredictable and govt continues to have shortage of fund. On top of these we have regulatory hurdles installed at every short distance and govt is unlikely to be able to correct this wrong.
Overall we are dependent on spirit of people to rise to prosperity which ultimately will push us on growth. Alternatively, State driven large programs will play some part, as I think.
Mohit Ambani, Reading a lot about politics and policies
Looking at some fundamentals a strong economy is created by export led growth in the start thereby increasing the capita income and then make it a self consumption economy.
USA was the factory house back in start and China is now the world's factory which will eventually have a transition to consumption based economy in near future.
India is a very big purchasing power economy but exports are not that high so most of India's revenue is from consumption.
Mayur Vaghasiya, Stock Trader at Upadhyay's Securities (2016-present)
There is no magical formula which lead the country. First of all for Strong country growth needs country's population intric growth. Which is lead by employment.
For country growth most important is employment of people. For that we must starting more and more manufacturing in India and then export outside of country.
But latest manufacturing data poorly and black true is that last 4 year no employment growth in India under NDA government as per RBI data. Employment growth flat.
So we keep focus on manufacturing so that more and more job produce and also country growth faster rate.
Rakesh Wagh, Engineer, Healthcare, Information Technology
Adopting a particular economic model sounds very unnatural and unsustainable. World economy is like a big jigsaw puzzle. If a piece(country) does not find itself in a tight fitting position, it will often be marginalized (example north Korea and Iran to certain extend). America is a big central piece in this puzzle and being in such a dominant position it pretty much dictates how it would like other pieces to render themselves. Countries like Iran, Iraq and North Korea tried not to be part of this puzzle and define their own existence. However that did not work. In fact defining your own existence wont work unless their is a level playing field, where each piece of puzzle are equal.
Long story short, India must decide how much of "globalization" it need to adopt. Less global economy for the country means less control in hands of America (and its allies). If India can find a self sustained local economic model where small economies/societies thrive and balance each other such that the net sum is progressive, then India will be able to achieve what lot of other countries could not and create a brand new economic eco system that is sustainable, progressive and less harm to the planet and its inhabitants
Dadi Naga Sai, Jai Hind
Many succesful people always say that if your path to success is making you feel like its a tough one then you're on the right path to success. And when you want to succeed as fast as you can with easy path you may first feel like you succeed but you'll come to know what happened later.
Export led growth is risky because even though you're an independent nation you're again dependent on other nations. If other nations fall then you'll also fall. If you're export led nation your position is just like any other street seller who is looking for someone to buy your goods so that you can eat for that night. Export lead growth is easy way to develop
Consumption LED growth is ideal because you're not looking for someone to come up and buy your goods. Even if other nations are falling you'd still be standing strong.
Consumption led growth is a tough way to develop.
Mathew Cherian, I watch China as they drive the World Economy
This is a good question and very difficult to answer because the conditions prevailing in our country may not allow a choice in which ever direction one can go in our country. For example we live in Gandhian frugal environment. Anything that provide welfare is taxed as luxury. This mind set led to substandard products with no functional quality to be manufactured here. So our products became non competitive for world markets that prefer functional and hazard free products. We export mainly naturally occuring environmental products and materials much. Textiles sometimes find markets in south east Asian countries.
On opening up the economy WTO quota helped us to improve this situation since other countries were forced to buy our products on a quota basis.
Moreover our economy has no infrastructure of scientific quality to create large scale manufacturing base. A distance that can be covered in say 8 hours usually take 4 to 5 days for a truck to reach. This increase the cost of transportation and perishable goods cannot be transported this way. Moreover inter state taxes are heavy making transportation inefficient. One other major road block is poverty is rampant here making difficult to obtain and train work force who can provide quality workamanship. There is also deficit in power for large scale undertaking to come up and grow. Bureaucracy makes it more difficult to enter and operate here.
These are few of the roadblock in restricting our choice as to what of philosophy work for India like local consumption led or export led. Ideally a hybrid form is better. We are building up our infrastructures slowly. May be in the future our environment will improve and faster resolutions will be possible with more committed and trained work force who find a need to be creative which help us in moving in the right direction.
Balaji Viswanathan, Knowledge lover.
There are different schools of thought.
One group of thought - held by the Indian government as of 2015 - is that China like model is more suitable to bring the poor out of lower rungs. While IT and finance might bring a lot of revenues & GDP addition, they don't employ the poor. Thus, we might be building two nice stories with no stairs inbetween for our poor to utilize the service revolution. Export led manufacturing has worked in a lot of countries - US, Europe, Japan, China, Korea - in the past and thus is a proven model.
Another group of thought - held by the head of India's Reserve Bank - is that the China like model can no longer work. The global economy is far slower than India's domestic economy and thus it is pragmatic to focus on serving the domestic economy. This might help manage inflation better and might even offer faster growth.
To understand these different schools of thought, you need to understand the fundamental objectives and strains. It is the job of the government to primarily focus on employment. No one else can do that. No jobs, no votes. On the other hand, RBI doesn't really care about jobs. It is not in its objective or mission. Its mission is to control inflation and rupee.
Thus, the government makes an emotional appeal focusing on jobs, while the RBI makes a more logical approach of focusing on inflation. Export led policy would weaken currency and increase inflation. RBI doesn't like inflation.
The question is between jobs and inflation and this is fundamentally all major economies face. The Prime Minister, like an entrepreneur, wants to gamble taking the China route. His banker says na! na! na!
In my personal opinion, we need to try a little more of the China model. US used to be the world's top exporter for a long time. Japan used that route too. It helps the poor better. Especially when companies are trying to cut costs during a slow down, India could potentially offer cheaper manufacturing in some sectors.
There's a proverbial caution about putting all your eggs in one basket. Concentrating upon one strategy may not be the way to go. Exports can help develop a thriving domestic consumer base, but if it's the only basis the consumer base is not very widespread. You get what many decry as "wealth disparity".
Export-driven expansion often involves devaluation of the currency, as has been seen in China. This taxes the people to subsidize exports. Again this makes wealth disparity a problem. Those subsidized companies and bureaucrats get the money first; people at the bottom get the money only after its devaluation has neared or reached completion.
India has done some productive things such as microloans.
India would do well to reduce the regulatory burdens. An experiment was done, by Reason magazine if I recall correctly. They filed to start a business in each of three places. In Hong Kong the governmental red tape was done in a day. In New York City it took a couple months. In India it took a couple years. Placing such a drag upon development helps neither exports nor consumer vendors.
I have no doubt that without the bureaucratic burdens the energy of Indian people could achieve quite a bit.
Pranav Kumar, Passionate about Economic Development
Export led growth.
Consumption led growth is the tortoise and export led growth is the hare. Export led growth is likely to be faster than consumption led growth . Export led growth is also likely to be more volatile and more susceptible to highs and lows of global cycles. The very small set of countries that rapidly became developed - the likes of post war Germany, Japan, Korea, Taiwan and Singapore - all had this strategy.
If you believe this, the answer is straight forward. Why would India - a very poor country - not like to get rich faster and reduce poverty sooner? I think India can learn to manage the volatility that comes from being export dependent.
The real question is not whether a developing country should try to achieve export-led growth, but whether it can, without resorting to short-cuts? By short-cuts I mean currency devaluation and/or subsidies and SOPs to artificially prop up the export sectors. Most export-led growth miracles have happened on the back of manufacturing, so a related question is can India (or Africa for that matter) grow based on manufacturing-led exports? And if not, does it mean India can not achieve miracle growth of China and others?
I think India can achieve export-led growth, but it will not be as manufacturing heavy and hence as fast as in China. We have already got IT services and Pharma. Some manufacturing can definitely come up (admittedly much smaller than China even in best case, but a pillar of exports nevertheless). Tourism has billions of dollars worth of export potential. We also have couple of indirect levers: Remittances and Gold. Remittance - not exactly exports - are already very big and could be boosted further with emigration of Indians esp in healthcare services. On the other hand, if government is able to wean Indians of their Gold addiction and pursue them to monetize gold , that will also boost our "net" exports.
Whether India will succeed remains to be seen, but it is possible!