From: venkat@unixg.ubc.ca (Ramesh Venkat)
Newsgroups: soc.culture.indian
Subject: Re: India's Place in the World Economy
Date: 10 Jan 1993 21:41:14 GMT
Organization: University of British Columbia, Vancouver, B.C., Canada
NNTP-Posting-Host: unixg.ubc.ca

In article <1ipko1INNkrl@uwm.edu> srinivas@csd4.csd.uwm.edu (Srinivas Vuppuluri) writes in response to chandra@cannelloni.cis.ohio-state.edu:

>I think there is some confusion here in the way economic output is
>measured. Instead of considering market value, it seems more rational
>to consider value in some universal units. Thus, a ton of
						  ^^^^^^^^^	
>standad-grade steel would have the same value whether produced in
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
>India or elsewhere. 
^^^^^^^^^^^^^^^^^^^^

	This ignores the problems of cost and quality. Indian steel costs 
	more to produce.  In fact steel from Japan (made from iron ore
	imported from India) is cheaper than what is produced in
	India.  Indian steel mills are very inefficient (with the
	exception of Tisco, which is in the private sector.  Salem
	Steel is supposedly the most efficient among the public
	sector units.  I am not sure if it produces export quality steel)

	Because of the twin problems of higher costs and lower quality
	the marketability of Indian steel is limited.  You cannot assume
	that all steel produced in India is world standard and that costs
	are similar to that in countries like Japan.

Whether Indian steel commands a lesser or higher price
>in the international market than that produced by another country
>is an issue determined by forces like advertising, trading
				       ^^^^^^^^^^^^^^^^^^^^^
>relationships, reputation, subsidies etc.. 
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

	You left out QUALITY.  

[tangent mode *on*]	
	India's inability to penetrate lucrative foreign markets may
	(to some extent) be attributed to poor marketing.  But most 
	often the problem is one of poor quality.  I've heard stories
	about foreign buyers returning goods because of poor quality.
	With experience and an understanding of competition, India
	will overcome this problem.  Remember, even Japan was once
	known for the poor quality of its goods.
[tangent mode *off*]

Ranks based on market value
>would therefore be biased and quite difficult to compute.
>
>Moreover, since India is not a net-exporter, international market values are
>difficult to deduce. While our perception may be that Indian goods
>sell for less in international markets than they do in India, this is
>hard to substantiate.
>
>I think the original statement in this thread was that India has a
							^^^^^^^^^^^
>fairly impressive volume of industrial output which makes it worthy of
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^  
>being considered industrialized nation. The issue of market
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
>value should not change this perception. 

	GDP alone cannot be the basis for deciding if a nation is
	industrialized or not.  Consider these facts:
	1) In India even now an overwhelming majority of the people
	   live off the land.  
	2) The benefits of whatever industrialization has been 
	   achieved have not percolated to the level of the common man.
	   As a result life is still full of many hardships for the
	   common man.  Most work is still very manual labor intensive.
	3) The standard of living and quality of life is no where near
	   what it is in the Western nations or even the Asian Tigers.
	
	These facts suggest that India is not yet an "industrialized"
	country, although it has a diverse and significant industrial
	base.  I think, if as a nation we can get our priorities straight,
	India has the potential to become the miracle economy of the
	90s (at least that's what people in the WB seem to think) and
	perhaps even an economic super-power.  But there's a long way to go.



Ramesh Venkat
--------------------------------
e-mail: venkat@unixg.ubc.ca
	rvenkat@shark.stmarys.ca