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“कुटंुब” भारतीय अर्थ�व्यवस्थेचा पाया

Dr. Varadraj BapatFaculty in Accounting and Finance,

Indian Institute of Technology,Mumbai

varadraj@som.iitb.ac.in9869083118/ 9892413119

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कुटंुब भारतीय संस्कृतीप्राणी व मानव समाजअभारतीय समाज ग्रीक कॅर्थोलि$क सुन्नीस्त्री प्रधान कुटंुबाचे स्थैय� भारतीय कुटंुबांमुळे भारतीय अर्थ�व्यवस्था टिटक$ी आता सुदृढ होत आहे

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अभारतीय समाज ग्रीक कॅर्थोलि$क सुन्नीस्त्री $ा दुय्यम स्थान गु$ामगिगरी

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अभारतीय समाज ग्रीक

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अभारतीय समाज

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अभारतीय समाज गु$ामगिगरी

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अभारतीय समाज गु$ामगिगरी

8Strength: Bharatiya Sanskruti

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Noted economist and journalist S. Gurumurthy explaining how Indian economy feminine in nature. https://www.youtube.com/watch?v=8x_1VFZxkSs

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‘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/Countrys-Economy-Family-based-Woman-centric-says-Gurumurthy/2014/01/24/article2016856.ece

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• 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.

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• 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/12guest3.htm

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What is GDP ?Total value of production of goods n services (in India).

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• Indian Economy • GDP $2 trillion (nominal) 10th; • $5 trillion (PPP: 3rd)• GDP growth 8%• USA Economy• GDP• $17 trillion • GDP growth 1.6%

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Share in % of world GDP based on PPP--

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Overall Debt on Economy ?

Which countries have more debt ?

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Overall Debt % of GDPCANADA= 276 %RUSSIA= 72%UNITED STATES=280%CHINA= 184 %BRAZIL = 148%INDIA= 122 %BRITAIN = 507 %JAPAN= 512 %GERMANY= 278 %SOUTH KOREA=314%FRANCE= 346 %SWITZ= 314 %SPAIN= 363 %ITALY = 314 %

@Prof R.Vaidyanathan,IIMB,2012

http://www.economist.com/blogs/graphicdetail/2012/01/daily-chart-8

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Debt in USA

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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

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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.

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Debt in USA• Fannie Mae

http://grandfather-economic-report.com/debt-nat.htm81% ($46 trillion) of all debt was created since 1990,a period primarily driven by debt instead of by productive activity.

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Debt in USA

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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/de

bt-nat.htm

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• VERY HIGH level of Debt

• Govt • Household

• Which one is more serious ?

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.”

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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.

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Household Debt % of GDP

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What is Driving US ?U.S. household consumer debt profile:Average credit card debt: $15,112Average mortgage debt: $146,215Average 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/averag

e-credit-card-debt-household/ accessed on 8.11.2013

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Household Debt in US

A sign in a US bank:

“We can loan you enough money to get you completely out of debt.”

US Debt

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• Western Models – Capitalism and Communism

• Market lead vs Budget lead model• 1990 communism collapsed

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• 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

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Family Destroyed - Marriage  In US, More than 50 % of children born to under 30

women are out of wedlockWhat was illegitimate has become now normal.

Among blacks (75%) and Latinos (55%) - Marriage is Luxury Goodhttp://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

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Family Destroyed - Marriage

A million children growing up without fathers in UKIn UK there are more households with TV’s than

fathershttp://www.bbc.co.uk/news/education-22820829 (9 June 2013)

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StrengthsFamily ValuesSocial Capital

Bharatiya Sanskruti (Indian Culture)

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Family ValuesSocial Capital

 

• Strong family ties• Low rate of crimes• Rapes are 30 times more in US than

in Bharat

05/03/2023 Dr. Varadraj Bapat, IIT Mumbai 3737

Impact ?

• Saving Rates ?

05/03/2023 Dr. Varadraj Bapat, IIT Mumbai 3838

Impact ?

• Saving Rates ?• India 30 %• Saving is generally for next generation and

next birth• कुटंुबाची महत्वाची भूमिमका • काटकसरीचा संस्कार• बचतीची प्रवृत्ती

US on a binge

US personal saving

-2

0

2

4

6

8

1992 1997 2002 2007

as % of disposable income

US on a binge

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High Domestic Saving & Investment Rates

1990

-91

1991

-92

1992

-93

1993

-94

1994

-95

1995

-96

1996

-97

1997

-98

1998

-99

1999

-00

2000

-01

2001

-02

2002

-03

2003

-04

2004

-05

2005

-06

2006

-07

2007

-08

2008

-0915.0

20.0

25.0

30.0

35.0

40.0GDS

GDS

Perc

enta

ge to

GD

P

05/03/2023 Dr. Varadraj Bapat, IIT Mumbai 4242

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

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• Gold• Investment: beneficial or harmful ?• Gold accumulation by Indian families• गिनयमिमत सोने खरेदी • सोने म्हणजे $क्ष्मी

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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

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• REMITTANCES from abroad ?

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REMITTANCES

Top recipient countries of remittances (in billions of US Dollar)Country 2008 2009 2010 2011

India 50 49 53 64

China 23 23 33 40

Mexico 26 22 22 24

Philippines 19 20 21 23

Nigeria 19 18 20 21http://en.wikipedia.org/wiki/Remittance

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StrengthsIntegral approachSustainable thinking

Bharatiya Sanskruti

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• What is world economic history ?

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Share of World GDP from 0 to 1998

Year

0 1000

1500

1600

1700

1820

1870

1913

1950

1973

1998

W. Europe

10.8 8.7 17.9 19.9 22.5 23.6 33.6 33.5 26.3 25.7 20.6

USA

0 0 0.3 0.2 0.1 1.8 8.9 19.1 27.3 22.0 21.9

China

26.2 22.7

25.0 29.2 22.3 32.9 17.2 8.9 4.5 4.6 11.5

India

32.9 28.9

24.5 22.6 24.4 16.0 12.2 7.6 4.2 3.1 5.0

World

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

GDP during 2,000 yearsSource: Angus Maddison. 2001. The World Economy: A Millennial Perspective. OECD, Paris

Share of Global GDP (%): Year 0-1998

0

5

10

1520

25

30

35

40

Western EuropeUnited StatesJapanChina India

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• Bharatiya approach is integral and sustainable

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The Integral Approach v[kaMeaMy

0 Individual1 Family2 Society3 Nation4 Nature5 Parameshti

@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").

@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.

@Prof R.Vaidyanathan,IIMB,2012

• Global entrepreneurship monitor shows that …………. % of India Population is engaged in various entrepreneurial activities.

• 18 %

@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

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

Despair …?

• We continue to look to at West for our own solution.

India on the move…?

• Towards Superpower ? or• Towards Jagat Guru ?

From Davos to DevGiri !

• Reasons to rejoice:

– Transition from Exploited Subdued India to Enlightened Self-confident Bharat

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.

Economics that hurt the moral well-being of an individual or a nation are immoral and therefore sinful.MM-263That economics is untrue which ignores or disregards moral values.XXV-475

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.

• 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.

India has to get into act

•The Question is are we getting ready to create a new world order?

Bharat has to get into act

References

1 Indian Models of Economy, Business and Management Models- K Kanagasabapathi

2 India Unincoporated- L Vaidyanathan3 Indian Business and Financial Models

course by S Gurumurthy conducted at IITB.

https://www.youtube.com/playlist?list=PLyo3HAXSZD3zrXnXJ4Pe3teQrzTPa-Da1

Further readings

1 Too big to fail- Andrew Ross Sorkin2 The Inside Job- A Documentary on how

the global economic crisis happened.

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