A recent report
by Morgan Stanley predicts that China's economy
should be bigger than that of the US in a
decade, while the Indian economy will be bigger
than the Japanese economy over the same period
of time (in purchasing power parity terms).
As of today, India and China account for 40
per cent of the global working-age population
and about 18 per cent of the global economy.
The report predicts that it will take just
two decades before the two countries' share
in world GDP matches their share of the total
global population.
The report, like that of the Goldman Sachs'
BRIC report a few months ago, indulges extensively
in crystal ball gazing. Other forecasts: the
share of both countries in world exports will
rise from 12 per cent currently to 20 per
cent by 2010 and 30 per cent by 2030.
China is obviously ahead and the report argues
that India's per capita GDP will reach China's
current level in 13 years if growth continues
in India at 6 per cent or in 10 years if it
grows at 8 per cent. If India and China continue
at their average rates of growth clocked over
the last 10 years, the nominal GDP of both
countries (in dollar terms) will reach $1.3
trillion and $3.9 trillion, respectively,
by 2015.
An initial draft of the National Employment
Guarantee Bill is believed to have been
made and sources say that it is closely
based on Maharashtra's employment guarantee
scheme, but vests local elected bodies like
panchayats with far greater powers.
The draft Bill is the outcome of promises
made in the Common Minimum Programme by
the Congress-led United Progressive Alliance
government to provide a minimum of 100 days
of employment to one member of all poor
households in the country.
Members of Sonia Gandhi's national advisory
council, who include economist Jean Dreze,
have overseen the preparation of the draft.
"The draft does seem to be a serious
attempt to try and implement the promises
made in the CMP" says an academic who
has seen the draft.
 |
In 2000, over 92 per cent of all retail
loans made by banks in India were to customers
in the top six cities (Mumbai, Delhi, Chennai,
Kolkata, Hyderabad and Bangalore). By March
2003, that proportion had fallen to 67 per
cent. In 2000, 57 per cent of total housing
loans was made in these six cities - by
2003 it was 45 per cent. This is according
to data released by the RBI last week on
the spread of various types of loans across
the country. That increasing geographical
spread may seem like progress till you realise
that according to the 2001 census, slightly
less than 6 per cent of India's population
lived in those six cities.
Among those cities, the strongest growth
in those years was in Bangalore and Chennai,
where home loans in each of those cities
grew by 2.28 times.
The other interesting aspect is the returns
that banks earn on those loans. Since 2000,
interest rates on home loans have fallen
from above 13 per cent to 8-9 per cent in
2003. But a large chunk of those loans were
given out in earlier years at higher rates.
So the actual returns that the banks earn
are much higher and have fallen by much
less. In 2000, Indian banks earned interest
at a rate of 12.6 per cent on their home
loans. By 2003, that had fallen to 11.6
per cent.
|
