The comparison isn't just economic. As a visitor, many things made more sense to me when I started seeing India through the lens of a confederation of mini-nations rather than a unified country in the American or European sense. Far more so than in America, each individual state has distinct cultures, cuisines, and languages. Historically many of them were once kingdoms themselves, which contributes to the sense of distinct identity.
The animosity is kind of blurring now, at least in South India. We have Bangalore and Hyderabad which are excellent examples of a super-heterogeneous population, running as one big machine. Chennai's trying, but hasn't gotten there yet. ;)
The population is heterogeneous, but there's still a fair amount of distrust and alienation between north and south Indians. However, I agree that that's still a step forward from the "animosity" of the previous generation.
I won't call it "fairly large". Sure, some differences exist because of the culture and the size of the country. And I'm not considering divisive politicians when I say this.
Thought this might be relevant. There was a recent discussion on freelance job rates and the OP was worried that bids for US$10 per hour by people from India (etc) will make it hard for him to make higher bids.
Consider this. Working at $13 an hour, it equates to ~Rs.650.
650 * 25(days of working in a month) * 12 = Rs1,95,000 per annum, for working an hour a day. If I managed 3 hours of work at that 'cheap' rate, I'd be one of the highest earning person among my friends [who have all graduated in CS and work in various IT companies.] Pretty awesome to have a cheap economy, right? :)
Speaking of the cheap economy, how does it effect things like consumer electronics? Would you expect to pay $1,500 USD on a MacBook pro, or is stuff like that also cheaper in India?
You are confusing Macbook and Macbook Pro. Macbook Pro is 70k rupees or 1560 USD, which means 360 dollars more than the US. Also at this price, it is more than 1.5 months salary for me, and I earn above average for my level. So purchasing power parity wise, its much more expensive.
not sure about mac, but other laptops are costlier in India. But Dell is definitely cheaper in the US. :( Conversion rate is about 1USD=50Rs. About 5-10% cheaper in the US.
US: http://www.dell.com/us/p/laptops#facets=51795~0~11401827,135...
India: http://www.dell.com/in/p/laptops.aspx?c=in&l=en&s=dh...
We do have our fair share of Chinese duplicate electronics. :)
The rates are higher because most of the original stuff is also made in china. Import duty is pretty bad here.
[50% import taxes on alcohol.]
No, it's terrible. First of all you're not mobile. Most any other country you'd like to vacation in is going to appear insanely expensive. Second of all, more and more products are (for lack of a better term) "internationally priced". A Macbook Pro won't cost you much less than it costs me.
I'd much rather live in an expensive place. Then I can vacation anywhere I want because everywhere else is so cheap.
Like pointed out earlier, bad economic policies are making the rich richer and poor poorer. Most of us IT folks are pretty much at the top in terms of income. So yeah, while bad on a national level, I meant it's a pretty good place for IT professionals.
Why do you think 'Bangalore' became a verb?
In most non-managerial posts, even if you paid me half the equivalent of what you get in the US, i'd still be living a comparable life here. That's what I meant by cheap economy.
If I got $1000 from RA/TA(etc) a month in a US grad school, I'd be making more (face value) money than professionals with 4-5 years of experience here. But I can do way more with that money here. I'm spewing out gibberish, but I hope you get my idea. :\
>Most of us IT folks are pretty much at the top in terms of income.
In the top of our economies. But take your high paying Indian position and then plan a vacation to Switzerland. You're not going to feel like the top anymore. I, however, could have a mansion in India easy enough (and know a lot of Indians doing exactly that; working in Switzerland and paying for wonderful mansions in India).
This is one of those articles where the graphic does a disservice to the content of the article, which has its own glaring problems. Not only that, they seem to be using absolute GDP numbers which are meaningless, because a $1 goes a much longer way in U.P. than it does in NYC. At the very least they should have used PPP numbers. Some glaring problems:
1) As the content of the article points out, Uttar Pradesh is the most populous state in India. This is why comparing them to Qatar in the graphic, just on the basis of similar absolute GDP numbers, is very misleading. Qatar's population is under 1.5M. Uttar Pradesh's population is nearly 200M.
2) Comparing Gujarat to Angola is like comparing the Silicon Valley Bay area to an arbitrary African country based on similar GDPs. Gujarat has one of the best infrastructure setups in all of India and has been amongst the fastest growing states for the past decade.
3) Almost all of Maharashtra's $175B GDP comes from the city of Mumbai. So if you want a comparison to Singapore, you should look at the city of Mumbai, not the state of Maharashtra.
They used PPP for the GDP per person comparison (but not for the GDP)
They are not trying to say Qatar is generally comparable to Uttar Pradesh, just pointing out that it has the same nominal GDP. This can be interpreted in any number of ways but that is all that the chart claims to show.
And of course they did a similar thing with United States and China:
Not very surprising because India is 10th by GDP (4th by GDP(PPP)) and has 28 states. On an average each state would have a GDP of $53 billion, equivalent countries rank approximately 60th in the world.
A much better comparison is the tab showing population. Look at Uttar Pradesh (labeled Brazil). It has a population of 199 million, only China, India, US and Indonesia are more populated. Karnataka (labeled Italy) is the 9th most populous state but Italy is 4th most populous country in Europe.
It's interesting comparing and contrasting India to China economically. They both are wildly unequal, with a max 7x of the min. But China is vastly richer; its poorest state has a GDP per capita equal to that of the whole of India.
This is what is most worrisome about India. The rich is getting richer and the middle class is improving but the poor on the whole has not moved a bit. With the rate the population grows the poor probably regressed. Its a shame because the outsourcing party is not going to last forever.
How did you arrive at that from the op? India's gini index has been quite stable[1]. India only makes about 50 billion or so a year in revenue from outsourcing[2].
First, not just other developing countries like Russia, Brazil and China but even US has more inequality than India. [1]
Second, Indian outsourcing industry is over-hyped. It contributes just 5% to the Indian GDP. But India is silently making big progresses in other industries. How many people here know that India is now the world's biggest manufacturer of small cars, overtaking Japan? [2]
Those statistics are a little misleading.
In a country where, despite having a few billionaires, by and large everyone is fairly poor - these stats will not show inequality. Because most people in India are equally poor.
The second example you give is, in fact, an example of outsourcing, as 50% of the cars are generated by American, Japanese and Chinese companies operating in India, with the other 50% being Maruti, which is also partially Japanese owned.
For India to succeed beyond the hype, it's going to take more than gradual increases in GDP. It will require a cultural revolution. That hasn't happened yet.
Are you saying Gini co-efficient doesn't show inequality? How? We're not talking about poverty here, just 'inequality'.
"The second example you give is, in fact, an example of outsourcing"
That's not outsourcing but offshoring and how is it a bad thing? Don't you think talking about indigenousness in today's globalised world is nothing but jingoism?
"...cultural revolution..."
A country's culture and economy are tightly linked. It's a chicken-egg situation. Don't know about Indian culture but Indian economy is certainly doing good.
> Are you saying Gini co-efficient doesn't show inequality?
Let's take the parent's example. Say we have a country with 300 million people making $100 each per year (all exactly equal) and 20 people making $1 billion each per year (also all exactly equal).
The total income is $50 billion per year. The Lorenz curve looks like a straight line from (0%, 0%) to (100%, 60%) (because the area under those 2 people making $1 billion is zero for our purposes. That means the area under the Lorenz curve is 0.3, the area _over_ the Lorenz curve is 0.2, and the Gini coefficient is 0.4.
That's lower than the Gini coefficient for the US.
Which was the poster's point: if you have a very small rich elite and a vast pretty poor populace whose _total_ income is comparable to the total income of the elite due to the sheer numbers of the poor, then inequality measures like the Gini coefficient will be very strongly affected by the inequality within the poor part of the population. And if inequality there is low, overall inequality as measured by the Gini coefficient can end up looking pretty low in spite of the existence of the rich elite.
Note that if in the above example the 300 million people each made $1000/year, not $100, then the Gini coefficient would be very low... in spite of those 20 really rich guys.
Now maybe you don't think this situation has much inequality, but that's a separate issue. The claim was simply that in this situation inequality measures like the Gini coefficient will show low inequality.
Page 4 of this PDF ranks US Cities (metro regions actually) as if they were nations. New York City's economy is bigger than Australia or Mexico. Chicago is bigger than Switzerland or Taiwan.
http://www.usmayors.org/metroeconomies/2011/charts.pdf
India's economy is < 1.5x the New York City metro area
