Family and culture are major strengths of Indian Economy. Indian Economy has unique features like high savings, high share of small scale sector, role of gold .
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Kutumb Family indian economy unique strengths 2015
1. 20/12/13 1
“कु टुुंब”
भारतीय अर्थव्यवस्र्ेचा
पाया
Dr. Varadraj Bapat
Faculty in Accounting and Finance,
Indian Institute of Technology,
Mumbai
varadraj@som.iitb.ac.in
9869083118/ 9892413119
2. 2
कु टुुंब
भारतीय सुंस्कृ ती
प्राणी व मानव समाज
अभारतीय समाज
ग्रीक कॅ र्ोलिक सुन्नी
स्री प्रधान
कु टुुंबाचे स्र्ैयथ
भारतीय कु टुुंबाुंमुळे भारतीय
अर्थव्यवस्र्ा टटकिी
आता सुदृढ होत आहे
9. 9
Noted economist and journalist S.
Gurumurthy explaining how Indian
economy feminine in nature.
https://www.youtube.com/watch?v
=8x_1VFZxkSs
10. 10
‘Indian Woman as the Guide for the
World at Crossroads’, Gurumurthy
pointed out that the Indian economy
was essentially family based and
woman centric. “The family takes care
of elders, the infirm and the
unemployed; and the family is headed
by a woman, who is far sighted. This is
in contrast to the rights-based
approach of the West, where the state
is responsible for senior citizens and
the infirm,”
http://www.newindianexpress.com/cities/chennai/Count
rys-Economy-Family-based-Woman-centric-says-
Gurumurthy/2014/01/24/article2016856.ece
11. 11
• Feminine India, masculine China
• January 12, 2004 14:29 IST
• Allow me to suggest a new reason why
India may be more likely to experience
sound long-term economic growth, while
China may falter: the very different role of
women in each society.
• My first glimpse of the fact that women may
enjoy a different status in India than in
China was visiting ICICI and noticing the
number of women executives in its senior
management ranks.
12. 12
• Feminine India, masculine China
• At software companies in Bangalore, I was
impressed to see confident women
engineers leading presentations as 'project
owners.‘
• An expert on Greater China, Matei Mihalca
was recently selected by the World
Economic Forum as a New Asian Leader.
He is director at CITIC Capital, a unit of
China's largest financial group.
• http://www.rediff.com/money/2004/jan/12gu
est3.htm
13. 13
What is GDP ?
Total value of production of goods
n services (in India).
14. 14
• Indian Economy
• GDP $2 trillion (nominal) 10th;
• $5 trillion (PPP: 3rd)
• GDP growth 8%
• USA Economy
• GDP
• $17 trillion
• GDP growth 1.6%
19. 19
Debt in USA
• US has a Federal Govt debt pile of almost
$17 trillion, which is expected to rise to
almost $23tn in the next five years. Each
citizen's share of this debt is $54,023.15.
(Rupee 33 lakhs)
• The National Debt has continued to
increase an average of $2.62 billion per
day since Sept 30, 2012! (Rupee 16 crore)
• US Total Debt is $60 Tr
20. 20
Debt in USA
• Fannie Mae and Freddie Mac obligations
excluded
• Guaranteed obligations excluded
• Unfunded obligations excluded
• The U.S. government is obligated under current
law to mandatory payments for programs such
as Medicare, Medicaid and Social Security. The
present value of these deficits or unfunded
obligations is an estimated $ 45.8 trillion.
21. 21
Debt in USA
• Fannie Mae
http://grandfather-economic-report.com/debt-nat.htm
81% ($46 trillion) of all debt was created since 1990,
a period primarily driven by debt instead of by productive activity.
23. 23
Debt in USA
• http://www.brillig.com/debt_clock/
• http://www.usdebtclock.org/index.html#
• http://www.usgovernmentdebt.us/
• http://en.wikipedia.org/wiki/National_debt_
of_the_United_States
• http://grandfather-economic-
report.com/debt-nat.htm
24. 24
• VERY HIGH level of Debt
• Govt
• Household
• Which one is more serious ?
25. Now there is an argument that debts
are less troublesome if they are owed
by governments rather than by
households. The Nobel Prize-winning
economist Paul Krugman wrote:
"Families have to pay back their debt.
Governments don't - all they need to
do is ensure that debt grows more
slowly than their tax base.”
12/3/2015 Dr. Varadraj Bapat, IIT Mumbai 25
26. But others, such as American
professors Carmen Reinhart and
Kenneth Rogoff, argue that
beyond a certain point,
government debt tends to hold
back economic growth. They say
the threshold is about 90% of
GDP. A significant number of
countries, mainly rich ones are
close to or above those levels.
12/3/2015 Dr. Varadraj Bapat, IIT Mumbai 26
28. 28
What is Driving US ?
U.S. household consumer debt profile:
Average credit card debt: $15,112
Average mortgage debt: $146,215
Average student loan debt: $31,240 (Rs. 18 Lakhs)
In total, American consumers owe:
$11.08 trillion in debt
$846.9 billion in credit card debt
$7.75 trillion in mortgages
$1,002.0 billion in student loans
(As of November 2013)
• http://www.nerdwallet.com/blog/credit-card-
data/average-credit-card-debt-household/ accessed on
8.11.2013
30. A sign in a US bank:
“We can loan you enough
money to get you
completely out of debt.”
US Debt
31. 31
• Western Models – Capitalism and
Communism
• Market lead vs Budget lead model
• 1990 communism collapsed
32. 32
• Consumerism
• Bush urged the U.S. public to go shopping
and take vacations (2001 -9/11)
• (http://consortiumnews.com/2011/09/11/chronicling-americas-911-descent/)
• Market Economy
• Market Society
• Market Family
33. 33
Family Destroyed - Marriage
In US, More than 50 % of children born to under 30
women are out of wedlock
What was illegitimate has become now normal.
Among blacks (75%) and Latinos (55%)
- Marriage is Luxury Good
http://parenting.blogs.nytimes.com/2012/02/19/for-younger-
mothers-out-of-wedlock-births-are-the-new-normal/
http://www.nytimes.com/2012/02/18/us/for-women-under-30-
most-births-occur-outside-marriage.html?pagewanted=all
34. 34
Family Destroyed - Marriage
A million children growing up without fathers in UK
In UK there are more households with TV’s than
fathers
http://www.bbc.co.uk/news/education-22820829 (9 June 2013)
38. 12/3/2015 Dr. Varadraj Bapat, IIT Mumbai 38
38
Impact ?
• Saving Rates ?
• India 30 %
• Saving is generally for next generation and
next birth
• कु टुुंबाची महत्वाची भूलमका
• काटकसरीचा सुंस्कार
• बचतीची प्रवृत्ती
42. 12/3/2015 Dr. Varadraj Bapat, IIT Mumbai 42
42
the U.S. personal savings rate has been
on its way down. In other words,
consumers have been spending more
than they have been earning. Some
economists warn that this is troubling and
unsustainable.
http://www.businessinsider.in/CHART-OF-THE-DAY-Why-The-Personal-Savings-
Rate-Is-Tumbling/articleshow/21189234.cms 9 Apr 2013
43. 43
• Gold
• Investment: beneficial or harmful ?
• Gold accumulation by Indian families
• ननयलमत सोने खरेदी
• सोने म्हणजे िक्ष्मी
44. 44
Gold: Consumer Demand 1995-2011
Countries 1995 2000 2005 2008 2009 2010 2011
India 477 855 722 713 579 1006 933
China 427 329 293 432 472 667 811
Indonesia 119 107 81 59 35 48 51
Middle East 365 498 388 346 246 234 200
USA 315 396 377 267 265 235 195
U.K 46 65 59* 37* 32 27 23
Total
Incl.others
2864 3288 3092 3048 2503 3217 3450
Gold price
($/oz)
384.1 279.1 444.5 872 972.3 1224.
5
1571.
5
Note: 1 Tonne=32,151 troy oz of fine gold; * Jewellary only
Source: World Gold Council—Gold Demand Trends various issues
49. 49
Share of World GDP from 0 to 1998
Yea
r
0 100
0
150
0
160
0
170
0
182
0
187
0
191
3
195
0
197
3
199
8
W.
Eur
ope
10.8 8.7 17.9 19.9 22.5 23.6 33.6 33.5 26.3 25.7 20.6
US
A
0 0 0.3 0.2 0.1 1.8 8.9 19.1 27.3 22.0 21.9
Chi
na
26.2 22.
7
25.0 29.2 22.3 32.9 17.2 8.9 4.5 4.6 11.5
Indi
a
32.9 28.
9
24.5 22.6 24.4 16.0 12.2 7.6 4.2 3.1 5.0
Wor
ld
100 100 100 100 100 100 100 100 100 100 100
Source: Table-B-20 Appendix B; pp263; The World Economy: A millennial Perspective—Angus Maddison OECD Development Centre Studies --2007
50. GDP during 2,000 years
Source: Angus Maddison. 2001. The World Economy: A Millennial Perspective. OECD, Paris
Share of Global GDP (%): Year 0-1998
0
5
10
15
20
25
30
35
40
0
1000
1500
1600
1700
1820
1870
1913
1950
1973
1998
Western Europe
United States
Japan
China
India
53. 53
The Integral Approach v[kaMeaMy
0 Individual
1 Family
2 Society
3 Nation
4 Nature
5 Parameshti
54.
55. @Prof R.Vaidyanathan,IIMB,2012
• The Iron Pillar located in Delhi, India, is a 7 m (23 ft)
column in the Qutb complex, notable for the rust-
resistant composition of the metals used in its
construction.
• The pillar has attracted the attention
of archaeologists andmaterials scientists and has
been called "a testament to the skill of ancient Indian
blacksmiths" because of its high resistance
to corrosion.[1]
• the pillar, with a wheel or discus at the top, was
originally located at the Udayagiri caves, situated
near Vidisha in Madhya Pradesh.[8] This conclusion
was partly based on the fact that the inscription
mentions Viṣṇupadagiri (meaning "hill with footprint
of Viṣṇu").
56.
57. @Prof R.Vaidyanathan,IIMB,2012
• Kedarnath was the worst affected area during the
2013 flash floods. The temple complex, surrounding
areas and Kedarnath town suffered extensive
damage, but the temple structure did not suffer any
"major" damage, apart from few cracks on one side
of the four walls which was caused by the flowing
debris from the higher mountains. The surrounding
premises and other buildings in market area were
heavily damaged. The temple structure has been
standing erect and facing nature's fury for the 1000 +
years and it is expected that the structure has the
endurance to remain intact in the future as well.
58. @Prof R.Vaidyanathan,IIMB,2012
• Global entrepreneurship monitor shows that
…………. % of India Population is engaged
in various entrepreneurial activities.
• 18 %
59. @Prof R.Vaidyanathan,IIMB,2012
• One, the rise of India, which is regarded as
unique – without high FDI, high export and
mostly domestic forces-led, unlike that of
China. Also the Global Entrepreneur
Monitor [GEM] study 2003 showed that
Indian economy was entrepreneur-led,
unlike China which is investment and
state-led.
• Family based businesses are major
contributors to economy and employment
60. The performing India
• UNIDO study in 1997 identified 370 clusters in India
• 2600 rural and artisan clusters.
• Of these only 13 Govt.sponsored
• Contribute 70% of Industrial out-put and 66% of direct
exports
• Panipat – 75% of blankets produced in the country
• Tirupur – 80% of cotton knitwear
• Agra – 75% of leather exports
• Ludhiana – 95% of woollen knitwear,85% of sewing
machines,60% of Bi-cycles and spares
• Surat – 85% of diamond polishing and 60% of synthetic
textiles
• High technology easily absorbed and improvised
61. Despair …?
• We continue to look to at West for our own
solution.
62. India on the move…?
• Towards Superpower ?
or
• Towards Jagat Guru ?
63. From Davos to DevGiri !
• Reasons to rejoice:
– Transition from Exploited Subdued India to
Enlightened Self-confident Bharat
64. Our object in framing the
Constitution is rally two-fold: (1) To
lay down the form of political
democracy, and (2) To lay down that
our ideal is economic democracy
and also to prescribe that every
Government whatever is in power
shall strive to bring about economic
democracy. The directive principles
have a great value, for they lay
down that our ideal is economic
democracy.
65. Economics that hurt the moral
well-being of an individual or a
nation are immoral and therefore
sinful.
MM-263
That economics is untrue which
ignores or disregards moral
values.
XXV-475
66. Deendayal Upadhyay “I visualize for
India a decentralized polity and self-reliant
economy with the village as the base. We
cannot rely upon superficial Western
concepts like individualism, socialism,
communism, capitalism and need to be
rooted in the timeless traditions of our
ancient culture. He was of the view that
the Indian intellect was getting suffocated
by Western theories and ideologies and
consequently there was a big roadblock
on the growth and expansion of original
Bharatiya thought.
67. • Maharishi Aurobindo said:
“India shall arise upon the ruins
of the west” He said by the
year 2011 the western
countries will fall and India will
rise.
68. India has to get into act
•The Question is are we
getting ready to create a
new world order?
70. References
1 Indian Models of Economy, Business and
Management Models- K Kanagasabapathi
2 India Unincoporated- L Vaidyanathan
3 Indian Business and Financial Models
course by S Gurumurthy conducted at
IITB.
https://www.youtube.com/playlist?list=PLyo3
HAXSZD3zrXnXJ4Pe3teQrzTPa-Da1
71. Further readings
1 Too big to fail- Andrew Ross Sorkin
2 The Inside Job- A Documentary on how
the global economic crisis happened.