Comment by roymurdock | Hacker News Reader

Comment by roymurdock | Hacker News Reader

Helpful to keep in mind that India recently changed the way it calculates GDP by updating its base year and moving from a cost-of-input calculation to an expenditure calculation. This will give it a nominal boost as many currently non-market activities (cooking, cleaning, child rearing) enter the realm of the market as paid-for services, and are thus counted in the GDP calculation.

More on that in this previous article and discussion:

https://news.ycombinator.com/item?id=10649925

One thing that high growth inevitably brings is the negative externality of pollution, as we've observed in China. GDP figures still do not account for this hugely important factor that degrades the quality of living of those in the affected area, as well as the spillover to the oceans and the atmosphere from improper disposal of waste (burning, dumping). It will be interesting to see how bad the pollution gets as manufacturing continues to ramp up, according to the higher "economic complexity" (read: diversified basket of exports) per Harvard's analysis.

I was just in India in September and there are massive hydro-electric programs going on. Those have their own problems of environmental degradation and damage but I think India is keenly aware of seeing what has happened to China and is trying to avoid some of the same mistakes where possible.

I don't have a study to back it up, but it seems the high pollution levels in Indian cities are mostly because of extremely high vehicular density - based on my unscientific observation that most polluted areas of Delhi are next to transportation depots/stations.

Anand Vihar - a suburb of Delhi - for example, is the most polluted place in the world, but that's also because it's the gateway to Delhi for people from the state of UP(200m population). There are like 100 buses coming into that place every few minutes!

But then, there can be solutions which don't negatively affect growth - public transportation, more and better planned cities to reduce vehicular density, and most important of all, elimination of subsidy on diesel - because the sources of pollution aren't fundamentally tied to growth.

I don't usually buy the argument that high growth will bring abnormal levels of emissions in the Indian context. I think that's because manufacturing can be never be the engine of growth in India, because of inherent, almost unfixable problems we have in India.

So, that's why I think that the Indian growth story is fundamentally different from Chinese growth story - or even any other growth story in the world, and it's important to keep that difference in mind.

What are the unfixable problems that prevent manufacturing in India?

1. High Govt regulation, permission, licensing, red tape, labor laws, politics 2. Irregular power and water supply 3. Poor infrastructure/Logistics- Roads, Bridges, Rails, Ports

Why do you think any other industry except manufacturing will be better off unless these are fixed?

They won't. Software oddly, managed to avoid dealing much with the Govt because no one understood it, customers were overseas, it brought in much needed foreign exchange. Software succeeded in spite of all this.

That's interesting; shouldn't cost-of-input, income, expenditure measures all equal the same amount?

> That's interesting; shouldn't cost-of-input, income, expenditure measures all equal the same amount?

In theory, yes, they're all the same.

In practice, measuring each of the three has its own challenges, which means the raw numbers will differ.

It's just like physics - you can use the work-energy theorem or Newton's laws and arrive at the same result in theory, but depending on the experiment you're running, one may be easier to measure accurately than the other, and you'll end up with slightly different numbers on paper.

GDP should be depreciated.

Deprecated?

and replaced with what?

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