Latest news with #Subrahmanyam
Mint
21 hours ago
- Business
- Mint
India's growth and urban planning: On different planets
Metro stations in Athens are like archaeological museums, featuring pottery shards and other artefacts discovered during excavations. Moscow's subway stops are like art galleries, grandiose and distinctive, adorned with ornate chandeliers and striking murals. Mumbai's recently inaugurated mid-town metro station, in contrast, turned into a water-world on 26 May, with the season's first downpour flooding its concourse and platforms. This embarrassing incident symbolizes problems with India's haphazard urbanization and its official approach to infrastructure build-up. More critically, it highlights laxity in recognizing the effects of climate change. Also Read: Seven reform pathways to bridge India's urban investment gaps What made the incident doubly disconcerting were proclamations by Niti Aayog CEO B.V.R. Subrahmanyam that the Indian economy had become the world's fourth-largest. The incongruity between that statement and the lived experience of Mumbai commuters and Indians coping with sub-par infrastructure elsewhere was striking. Yet, there was a common link between that statement and the flooding episode: Subrahmanyam seemed to have jumped the gun (we'll know if the Indian economy has overtaken Japan's only once the current year is over), a precipitate action like the metro station being pressed into service before it was made rain-proof. The episode also underscored the death of irony: officials attributed the flood to untimely monsoon downpours despite common knowledge that a coastal city like Mumbai witnesses heavy rainfall for four months every year. But it is not just Mumbai. The previous day saw Delhi reeling under the season's first cloudburst, with streets and underpasses flooded. A few days earlier, unseasonal May rainfall flooded large parts of Bengaluru's extended city, damaging property and causing large-scale economic losses. City after city in India suffers from the same problems every year, and yet the political or administrative classes seem either helpless in solving such well-known problems or incapable of preventing their recurrence. Also Read: Urban renewal: Indian cities need a governance overhaul It is also a fact that climate change has altered weather patterns, but authorities do not seem to have taken this into their calculations. Mumbai's monsoons, for example, are getting increasingly erratic in terms of both timing and precipitation. Yet, infrastructure projects—whether it is roads or metro station walls—routinely fail to take this into account. This anomaly sits uneasily with India's growing urbanization: about 40% of the population lives in urban areas, with many experts claiming that the number may be closer to 50% or even higher. This data uncertainty has arisen because a large section of the urban population resides in informal shelters, invisible to the formal gaze but most vulnerable to urban failures. Every city depends on this section for the delivery of multiple services, but is typically blind to their income, education, housing or health needs. Worse, they are not covered by any labour laws and usually do not have any rights. In the triangulation between various interest groups in an urban settlement—the entrepreneurial class and those employed in the formal sector, the political class, bureaucrats, municipal authorities and real estate developers—this section usually gets the short end of the stick. With little or no access to water, waste collection mechanisms, modern sanitation systems or health facilities, this cohort suffers the harshest impact of climate change and extreme weather events. Yet, the country's big-budget urban build-up seems to ignore their needs. Also Read: Urban renewal: Indian cities need a governance overhaul A Niti Aayog report titled Urban Planning Capacity in India ascribes the continuing urbanization crisis to a lack of urban planning. 'For this reason, as the state and city governments continue to solve urban issues in a firefighting mode, urban areas struggle to achieve 'basic services for all'… India's urban story may be lauded globally or suffer irreversible damages in the next 10-15 years depending on corrective policy measures and actions taken at the beginning of this decade." Written in September 2021, the lack of any remedial action since then is already manifesting itself across multiple malfunctions, collapses and avoidable disasters. The report also points to a lack of qualified urban planners in the state planning machinery: against 12,000 town planners required at all levels then, there were less than 4,000 sanctioned posts, with half of those lying vacant. What the report fails to mention, though, is that state governments have largely outsourced urban planning to real-estate developers and infrastructure contractors. Projects are designed, finalized and executed based on interests divergent from user interests. This was amply evident in Mumbai over the past 36 months after the city's municipal corporation, under guidance from the state government instead of formal urban governance structures, unleashed multiple construction projects that choked city traffic and worsened air quality. The Smart Cities mission was conceived about 10 years ago, though there is still little clarity about what makes cities 'smart' and whether any city has actually become any smarter. Problems of urbanization in India have also been well documented along with solutions. The smart thing would be to implement some of those suggestions immediately, especially those that will make cities not only more empathetic, but also more resilient to economic downturns and extreme weather events. The author is a senior journalist and author of 'Slip, Stitch and Stumble: The Untold Story of India's Financial Sector Reforms' @rajrishisinghal
The Print
2 days ago
- Business
- The Print
India's GDP victory over Japan is still a year away. Here's why
Equally clearly, the database presents estimates of India's GDP for fiscal year 2025-26 as $4.187 trillion and Japan's as $4.186 trillion—that is, India's GDP exceeds Japan's by 0.02 per cent in 2025-26. From this, many, if not most, analysts have erroneously concluded that this won't happen until March 2026. Why erroneous? Because it is a fiscal year conclusion, and the 'centre of gravity' of an April-March fiscal year is September. So, it is likely that the NITI Aayog CEO, in making his hasty conclusion, was wrong by only four months. As it happens, Subrahmanyam was hasty by approximately a year. Critics of the government's assertion make two points, one relevant and the other 'noisy'. The relevant point is that the IMF World Economic Outlook (WEO) database clearly shows that for the fiscal year 2024-25 (ending in March 2025), India's GDP was $3.9 trillion while Japan's was $4.0 trillion—that is, Japan was 2.6 per cent ahead. Fortunately, both Japan and India have the same fiscal year—April-March—hence adjustments to WEO data are not needed. There has been much discussion about the assertions made by BVR Subrahmanyam, the CEO of NITI Aayog, India's only official think tank. Speaking at a press conference following the 10th NITI Aayog Governing Council Meeting chaired by Prime Minister Narendra Modi and presumably attended by senior bureaucrats, Subrahmanyam said that 'as I speak', India has overtaken Japan in current dollar GDP. Note that his conclusion and inference pertains to current dollar GDP, and we have to contend with the conversion from rupees to US dollars, and from Japanese yen to US dollars. India and Japan numbers First, let us look at the Indian estimate. Data just released by the Ministry of Statistics and Programme Implementation (MoSPI) on Friday shows that India's GDP in current prices for January-March 2025 quarter was Rs 88.17 trillion, or annualised Rs 352.7 trillion. On 23 May, the last market day before Subrahmanyam's assertion, the exchange rate was Rs 85.4/$—that is, current GDP in March 2025 was 352.7/85.4 or $4.13 trillion. Indian nominal GDP is growing by about 10 per cent a year. So, by March 2026, we should expect current India GDP to reach $4.54 trillion. Now we examine the fortunes of Japan's GDP. The seasonally adjusted quarterly estimate of Japan's GDP is 624.9 trillion yen for Q1 of 2025. On 23 May, the exchange rate was 142.6 yen/$; hence Japan's GDP in March 2025 was $4.38 trillion, some 6.1 per cent ahead of India's GDP on the same date. Given that exchange rates change every day, we need to decide as to what exchange rate we should use. Amongst many, we can use a calendar year estimate, a quarterly estimate or a 23 May estimate. But no matter which one we use, it will be wrong because exchange rates do not remain constant, and the future is not asked to see, que sera sera. All of us are concerned with the 23 May estimate, hence the discussion and this note. Japan's nominal GDP growth has averaged 3.4 per cent for the last three years. Assuming this to be the average for 2025-26, the estimate for March 2026 is $4.53 trillion GDP (as 4.38*1.034). So it will be sometime in March 2027 that India's GDP will exceed Japan's in current dollars. Again, que sera sera, the conclusion will depend on what happens to exchange rates. Changes in exchange rates affect nominal dollar GDP calculations. Assume in March 2027 all estimates come true except the $ yen exchange rate changes from 142.7 to 135 (the yen has become stronger by 5.7 per cent), then Japan's GDP will be 5.7 per cent higher and the day of decision will be delayed beyond March 2027. How do we interpret the dash to conclusion by the CEO? As a sports junkie, I recall countless occasions over the last 50 years when a sprinter looked over his shoulder to see his competitor – and lost the race. Also read: GDP data revisions—why India still struggles with sharp variations Lesson for India—good data, bad data What do we learn from his data-heavy exercise? First, haste makes wrong. Second, and more importantly, what difference will it make to the price of tomatoes (as I am often inclined to say) if India GDP is equal to Japan GDP? Third, and most important, and as pointed out by many, what matters is equivalence in per capita GDP, and on this, we are decades away—whether measured in current $ or PPP $ or constant dollars. One final comment. It is unfortunate that in the last ten years, most of the decision-making bureaucracy has lost respect for the data. The bad quality household consumer expenditure data for 2017-18 has still not been released. Several analyses of the 2017-18 data (see the 2022 IMF Working Paper authored by me and my colleagues Karan Bhasin and Arvind Virmani, and several other documents and books) conclude that the 2017-18 data was of such bad quality that the world, and India, needed to examine why it was of such bad quality. By not releasing that data, we have created an atmosphere where it is 'open sesame' for domestic and international scholars to question good Indian data. Food for thought for Niti and decision-making bureaucrats. Surjit S Bhalla is a former Executive Director at the International Monetary Fund. He tweets @surjitbhalla. Views are personal. (Edited by Aamaan Alam Khan)
Economic Times
3 days ago
- Business
- Economic Times
If India wants to be 'Viksit' by 2047...: Govt think-tank reveals which sector needs to contribute more to GDP
ANI Niti Aayog chief BVR Subrahmanyam India's manufacturing sector needs to achieve a growth rate of 15 per cent annually to elevate its contribution to the GDP to at least 25 per cent by 2047, according to BVR Subrahmanyam, CEO of NITI Aayog. Speaking at a Confederation of Indian Industry (CII) event, Subrahmanyam noted that manufacturing currently represents approximately 17 per cent of India's GDP. He said, "Manufacturing sector should be growing at 15 per cent at least. That's the only way to rise from its current share of 17 per cent to 25 per cent.' With projections indicating that India's GDP could reach $30 trillion as it evolves into a developed nation by 2047, the manufacturing sector is expected to contribute $7.5 trillion. To reach this GDP target, Subrahmanyam emphasized the necessity of increasing the average annual GDP growth rate from around 6.5 per cent to 7.5 per cent. 'We must bump up our annual GDP by another 1 percentage point to 7.5 per cent,' he achieve this growth, he highlighted the importance of several transformations, starting with urbanization. He pointed out that India's urbanization level is "very very low" at about 30 per cent, and it should exceed 50 per cent. "Many more cities and urban areas have to come up," he suggested. Additionally, he advocated for an increase in energy capacity and making these sources carbon neutral. Subrahmanyam also noted a positive trend in India's manufacturing landscape, mentioning that the country is transitioning from being a net importer to a net exporter of mobile phones. The defence sector is another area where India is seeing success. However, he raised concerns about India's limited presence in the global value chain. He observed, "We have not managed to crack at China, systematically over the past 30 years, it has placed itself at the heart of global value chains. Some or the other parts come from China, and there is a critical dependence on China. Shouldn't we be at the heart of global value chain?" He also addressed regional imbalances in manufacturing, and said, "There are five or six states in India accounting for 90 per cent of whatever is happening, be it domestic investment, manufacturing or foreign investment. What about the rest of India? We can't be on a two-speed track; everybody has to grow."In the context of this growth vision, Prime Minister Narendra Modi has urged states to develop their vision documents, leading to individual roadmaps that align with the 'Viksit Bharat' initiative. Subrahmanyam indicated that by the end of 2025, all states and Union Territories will have their vision documents and roadmaps for 2047. He concluded, "India is an aggregation of individual visions of small states. You cannot have a national vision where states work in different directions. 17 states have either complete or are on the verge of completion of their vision documents." (With ANI inputs)
Gulf Insider
3 days ago
- Business
- Gulf Insider
Visualizing India's Growing Economy
Comments made by CEO BVR Subrahmanyam of the Indian government think tank NITI Aayog about the size of the Indian economy have made headlines in the country's media. On Saturday, the head of the organization said that India was the world's fourth largest economy 'as I speak'. Subrahmanyam cited IMF data to back up the claim. In fact, as Statista's Katharina Buchholz reports, India is projected to overtake Japan and move up into rank four of the world's largest economies this year. The prognosis is, however, just a prognosis and the sizes of global economies in retrospect, i.e. after the current year is over, could turn out otherwise. It is highly plausible though that the projection holds true given the quick growth of the Indian economy over the years. IMF data shows that as recently as 2013, India was only the 10th largest economy. In 1997, India was only the 16th largest economy in the world in nominal, current terms. The country has overtaken many notable economies in size over the years.
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Business Standard
3 days ago
- Business
- Business Standard
National Manufacturing Mission to be launched next month: NITI CEO
The National Manufacturing Mission, announced in the 2025-26 (FY26) Budget, will be formally announced next month, NITI Aayog Chief Executive Officer (CEO) B V R Subrahmanyam said on Friday. The mission aims to propel India's manufacturing sector to a $7.5 trillion economy by 2047. 'We need a body with teeth, which can get things done. So, we are looking at how it is to be structured, the kind of muscle it needs to get things done spread across departments,' Subrahmanyam said at the Confederation of Indian Industry (CII) Annual Business Summit here. The mission is in the final stage, he said. In her Budget speech in February, the finance minister had said the National Manufacturing Mission would focus on five focal areas, i.e., ease and cost of doing business, future-ready workforce for in-demand jobs, a vibrant and dynamic micro, small and medium enterprises (MSME) sector, availability of technology, and quality products. The mission will also support clean-tech manufacturing to improve domestic value addition, and build an ecosystem for solar photovoltaics (PV) cells, EV batteries, motors and controllers, electrolysers, wind turbines, high voltage transmission equipment, and grid-scale batteries. 'It should be an overarching body, which has the power to give directions, control, and ensure that things get done… the idea is to understand, hand-hold, and see that these sectors get transformed within five to 10 years, in line with the mission's goal to achieve results by 2030 to 2035,' the CEO added. Citing the example of China's 'Made in China 2025' mission, prepared in the previous decade, that helped the neighbouring country become the largest automobile exporter from being a non-entity, the CEO said, NITI has probed their progress and mission in great detail. The mission will also look at skewed regional imbalances in manufacturing to ensure that the push is pan-Indian. A large part of the mission will be skilling initiatives by the Centre, with the Aayog looking to fundamentally change India's skilling framework. The government is also deliberating on new ideas like a 'skill passport' – the passport will be a record of a person's employable skills, keep an updated account of the skilling an individual goes through, and the number of times they have gone for reskilling and upskilling. The CEO also added that the industrial training institutes should be handed over to the respective industry – the government can fund it, but only industry has a handle on what the contemporary relevant skills are at a local level. The Aayog is also working on a net-zero carbon emission modelling framework. 'We don't have a pathway for the net-zero commitment by 2070. We've modelled it and next month we'll be announcing the pathway and making the model public... people can tinker with, and play multiple pathways to the same outcome,' Subrahmanyam said.
