demographic dividend India

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India enjoys huge demographic dividend. Indian culture and Indian Economic system are its core strenghts

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Demographic Dividend: Challenges Before Indian Economy II:

Demographic Dividend: Challenges Before Indian Economy II Dr. Varadraj Bapat Indian Institute of Technology, Mumbai varadraj@som.iitb.ac.in

Holes in the Demographic Dividend :

Holes in the Demographic Dividend Numbers in the population Vs Quality of human resource

Despair …?:

Despair …? We continue to look to at West for our own solution.

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4 Do we have the quality ?

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5 Strengths Saving Mindset Family Values Social Capital Integral approach Sustainable thinking Democratic Values Diversity Language skills Long history of Higher Education Entrepreneurship Bharatiya Sanskruti

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6 Strength: Bharatiya Sanskruti

Share in % of world GDP based on PPP--:

7 Share in % of world GDP based on PPP--

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8 Strengths Saving Mindset Bharatiya Sanskruti

Overall Debt % of GDP:

9 Overall Debt % of GDP CANADA= 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

Slide 10:

10 VERY HIGH level of Debt Govt Household

Debt in USA:

11 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.

Household Debt % of GDP:

12 Household Debt % of GDP

What is Driving US ?:

13 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

Household Debt in US :

14 Household Debt in US

Slide 15:

A sign in a US bank: “We can loan you enough money to get you completely out of debt.” US Debt

Slide 16:

16 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

US:

17 US Foreign investments made in the US total almost $2.4 trillion, which is more than twice that of any other country. (2012) Wiki CIA World Factbook

Impact ?:

3/2/2016 Dr. Varadraj Bapat, IIT Mumbai 18 18 Impact ? Saving Rates ?

Slide 19:

US on a binge

US personal saving:

US personal saving as % of disposable income US on a binge

Slide 21:

3/2/2016 Dr. Varadraj Bapat, IIT Mumbai 21 21 data show that 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

High Domestic Saving & Investment Rates:

22 High Domestic Saving & Investment Rates

Slide 23:

23 Gold Investment: beneficial or harmful ? Gold accumulation by Indian families

Gold: Consumer Demand 1995-2011:

24 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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25 Strengths Family Values Social Capital Bharatiya Sanskruti

Family Destroyed - Marriage:

26 Family Destroyed - Marriage   In US, More than 50 % of children born to under 30 women are out of wedlock - 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

Family Destroyed - Marriage:

27 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 )

Family Values Social Capital :

28 Family Values Social Capital   Strong family ties Low rate of crimes Rapes are 30 times more in US than in Bharat

Slide 29:

29 REMITTANCES from abroad ?

REMITTANCES :

3/2/2016 Dr. Varadraj Bapat, IIT Mumbai 30 30 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 21 http://en.wikipedia.org/wiki/Remittance

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31 Strengths Integral approach Sustainable thinking Bharatiya Sanskruti

Slide 32:

32 What is world economic history ?

Share of World GDP from 0 to 1998 :

33 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 years Source: Angus Maddison. 2001. The World Economy: A Millennial Perspective. OECD, Paris :

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

Slide 35:

35 India is not a story from Rags to Riches. It’s an economic empire re-establishing itself Western economies have to loot others to sustain

Slide 36:

36 Bharatiya approach is integral and sustainable

The Integral Approach :

38 The Integral Approach 0 Individual Family Society Nation Nature Parameshti

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41 Strengths Entrepreneurship Bharatiya Sanskruti

Slide 42:

@Prof R.Vaidyanathan,IIMB,2012 Global entrepreneurship monitor shows that …………. % of India Population is engaged in various entrepreneurial activities. Also Guess for US, Eurpoe and China

Slide 43:

@Prof R.Vaidyanathan,IIMB,2012 Global entrepreneurship monitor shows that …………. % of India Population is engaged in various entrepreneurial activities. 18 % US 11 % Europe 5 % China 3 %

Slide 44:

@Prof R.Vaidyanathan,IIMB,2012 Rise of Bharat, is 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.

The performing India :

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

Domestic Consumption drives growth:

Domestic Consumption drives growth The economist Stephen Roach of Morgan Stanley puts it, "India's domestic consumption-led approach to growth is better balanced than resource-mobilization & export driven model of China."

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47 Strengths Democratic Values Diversity Language skills Long history of Higher Education Bharatiya Sanskruti

Slide 48:

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.

Slide 49:

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

Slide 50:

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.

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51 Strengths Language skills – multiple language capacity of Indians Sanskrit Long history of Higher Education “Beautiful Tree” Dharma Pal ji Bharatiya Sanskruti

Slide 52:

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:

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:

Bharat has to get into act

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