In The Economist: India’s liberalisation began with a bang in 1991, but two decades on, the unreformed parts of the economy are becoming a drag for growth.
In a strange reversal of the norm elsewhere, in India the economic policymakers and economists have become the optimists while the bosses do the worrying. In June a deputy governor of the central bank predicted that the country’s economy would grow at a double-digit rate during the next 20-30 years. India has the potential for such a feat, with its vast and growing labour force and now famous entrepreneurial spirit. But in the past six months the private sector, which is supposed to do the heavy lifting that turns India from the world’s tenth-largest economy (measured at market exchange rates) into its third-largest by around 2030, has become fed up. more
How India’s economic rise turned an obscure communist revolt into a raging resource war. Jason Miklian and Scott Carney in Foreign Policy:
The richest iron mine in India was guarded by 16 men, armed with Army-issued, self-loading rifles and dressed in camouflage fatigues. Only eight survived the night of Feb. 9, 2006, when a crack team of Maoist insurgents cut the power to the Bailadila mining complex and slipped out of the jungle cover in the moonlight. The guerrillas opened fire on the guards with automatic weapons, overrunning them before they had time to take up defensive positions. They didn’t have a chance: The remote outpost was an hour’s drive from the nearest major city, and the firefight to defend it only lasted a few minutes.
The guards were protecting not only $80 billion-plus worth of mineral deposits, but also the mine’s explosives magazine, which held the ammonium nitrate the miners used to pulverize mountainsides and loosen the iron ore. When the fighting was over and the surviving guards rounded up and gagged, about 2,000 villagers who had been hiding behind the commando vanguard clambered over the fence into the compound and began emptying the magazine. Altogether they carried out 20 tons of explosives on their backs — enough firepower to fuel a covert insurgency for a decade.
Four and a half years after the attack in the remote Indian state of Chhattisgarh, the blasting materials have spread across the country, repackaged as 10-pound coffee-can bombs stuffed with ball bearings, screws, and chopped-up rebar. In May, one villager’s haul vaporized a bus filled with civilians and police. Another destroyed a section of railway later that month, sending a passenger train careening off the tracks into a ravine. Smaller ambushes of police forces on booby-trapped roads happen pretty much every week. Almost all of it, local police told us, can be traced back to that February night.
The Bailadila mine raid was one of India’s most profound strategic losses in the country’s protracted battle against its Maoist movement, a militant guerrilla force that has been fighting in one incarnation or another in India’s rural backwaters for more than 40 years. Over the course of the half-dozen visits we’ve made to the region during the past several years, we’ve come to consider the attack on the mine not just one defeat in the long-running war, but a symbolic shift in the conflict: For years, the Maoists had lived in the shadow of India’s breakneck modernization. Now they were thriving off it. More:
The Indian Express-Indicus Analytics study on how India will look in 2020:
* Fifty million more households in India will join the ranks of the middle class — defined by those earning between Rs 75,000 a year to Rs 10 lakh a year.
* The households-in-middle class number will jump from less than 120 million now to almost 170 million. Taking the accepted multiple of five people per household, this means that roughly 800 million Indians will be middle class out of an end-of-decade population of 1.3-plus billion.
And not-so-good (if there are no significant reforms):
By end-2019, UP’s standard of living will be what Pakistan’s was in 2005. And Bihar at the end of the decade will offer a standard of living comparable to what prevailed in Djibouti in 2005. MP in 2020? Like Republic of Congo in 2005.
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Prosperity gets in the way of family and corporate relationships, writes Raju Bist
In the mid-1990s, when the Birla family, which ran India’s second-largest business group, was in the midst of a bitter division of assets, one young family member quipped that “blood is thicker than water. But profits are thicker than blood.” A decade later, the country’s fast-rising prosperity is causing even more confrontations.
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