Just watched the movie this weekend, and first things first, I thought it was an excellent piece of storytelling. Let me just say that the amount of attention it is getting is justified, and leave it at that. This is not a movie review.
A significant amount of outrage (in India) has been directed at the depiction of extreme poverty in the movie. Newspaper editorials have called it "poverty porn". And, ironically, "slum-dwellers" have held rallies protesting what they call "poverty for sale". They also don't like being referred to as "dogs". (Though it is clear that the film-makers did not mean it in a pejorative way, they should have foreseen that the title could hurt the pride of people in the 'slums'. Is it possible to make a movie about slaves in America with the N-word in the title?). Amitabh Bachan (possibly the biggest name in Indian cinema) protested the depiction of poverty in the movie, contending that it portrays a "negative image" of India.
Correct me if I am wrong, but it is the first movie in a long time (if not the first ever) that focuses on the lives of people living in India's slums. Predictably, making movies about slums is not expected to make money if the target audience is the people that some slum-dwellers encounter at traffic signals. So, few Indian directors have the motivation to make a movie about slums.
No one dares contend that what the movie depicts is anything but reality. What the movie shows, is unfortunately all to real in Mumbai's slums. Or the the slums of any city, town or village in India. Arguments that the movie exposes India's underbelly - and that you would find similar stories in other nations if you dug deep enough are probably correct. Except that you don't have to dig too deep in India. 80% of India lives on less that Rs 80 a day. 14% of India lives on Rs 20 a day. And if you earn less than Rs 20 a day, odds are you live in a slum. Therefore, at least 5-10% of India lives in slums (this could be as high as 15%). Now, let's do some math here. 5% of 1.2 Billion is 60 million. Or 8 times the size of Israel. 3 times the size of Australia. 15% of a Billion is more than half the size of the US. If slums are 15% of India's population, then India's slums alone would be the world's 6th most populated nation. India has more slum dwellers than the Population of Pakistan, if we were to take the 15% estimate.
60% of Mumbai's 22 Million are slum dwellers. Mumbai alone has almost as many slum dwellers than twice the population of the entire nation of Israel.
Now, Mr. Bachan. Underbelly. Really?
Prosperous Indians don't empathize with the plight of the slum-dwellers in India. Rich Indians have made themselves numb to poverty (or otherwise, they just can't survive with so much of it all around). People know it exists, but just cannot do anything about it. So they ignore it.
This draws a parallel to former American Vice-President's (Al Gore's) Nobel Prize winning documentary, 'An Inconvenient Truth'. Most Americans know that the planet is warming, but are just not able to do anything about it. It is still likely that Global warming will go unabated - even though a good movie was made about it. On similar lines, slum poverty in India shall continue unabated (until economics sets it right) - even though a good movie has been made about it.
If the movie's masterful humanization of the predicament of the under-privileged arouses some empathy among the more fortunate upper classes; if this movie makes extreme poverty a larger electoral issue; if this movie motivates more youngsters to dream big and work hard, then it also deserves a Nobel Peace prize.
But something tells me that once all the hype is done, it will be back to business as usual in the media. And Dharavi will still be as miserable as ever.
Showing posts with label Numbers. Show all posts
Showing posts with label Numbers. Show all posts
Monday, January 26, 2009
Saturday, January 17, 2009
How rich is the average Indian?
The recent trip to India was an eye-opener of sorts. I had always been cognizant of there existing a significant parallel economy in India. But this current trip, I interacted with people familiar with the tricks of the trade. Presenting a few thoughts that I feel are pertinent:
Black money is undeclared money, money that has never seen a bank account, money that the government does not know exists; money that has not been taxed. Almost all Indians who deal in real estate have a secret stash of black money hidden under a mattress somewhere. And this is perhaps a reason why you don't see Indians use cards and checks while doing their groceries; they use cash.
Incidentally, some speculative articles in the popular press (not peer reviewed, mind you) contend that black money is saving the Indian economy from a US economy type fate in this credit crunch. Anecdotal evidence talking about Sony Bravias (worth a few lakhs) still selling despite hell having broken loose in other markets seems to corroborate this notion.
The size of the Indian black economy defies quantification. It is unanimously agreed that India's black economy is at least 20% of the size of its GDP. Some estimates hold that a conservative estimate of India's unofficial economy is around 50% of the GDP. And I have it from a few personal sources that the black economy is roughly equal in size to the actual GDP.
When we consider the annual per-capita income of India (or annual per-capita GDP, for that matter), do we also factor in the black component? We quote that the per-capita income of India is $2600 per year (based on PPP) - and we lament fact that we are living in a poor country. But, if 50% of the economy is black, then the per capita income would turn out to be $3900 per year. A significant change. Maybe Indians are as rich as Sri Lankans, it looks like. And If the economy were equal in size to the black economy, then India's per capita income would be $5200, almost on par with that of Egypt. (Of course, Egypt and Sri Lanka probably have under-reported their economies too, but not as badly as India).
Black money is undeclared money, money that has never seen a bank account, money that the government does not know exists; money that has not been taxed. Almost all Indians who deal in real estate have a secret stash of black money hidden under a mattress somewhere. And this is perhaps a reason why you don't see Indians use cards and checks while doing their groceries; they use cash.
Incidentally, some speculative articles in the popular press (not peer reviewed, mind you) contend that black money is saving the Indian economy from a US economy type fate in this credit crunch. Anecdotal evidence talking about Sony Bravias (worth a few lakhs) still selling despite hell having broken loose in other markets seems to corroborate this notion.
The size of the Indian black economy defies quantification. It is unanimously agreed that India's black economy is at least 20% of the size of its GDP. Some estimates hold that a conservative estimate of India's unofficial economy is around 50% of the GDP. And I have it from a few personal sources that the black economy is roughly equal in size to the actual GDP.
When we consider the annual per-capita income of India (or annual per-capita GDP, for that matter), do we also factor in the black component? We quote that the per-capita income of India is $2600 per year (based on PPP) - and we lament fact that we are living in a poor country. But, if 50% of the economy is black, then the per capita income would turn out to be $3900 per year. A significant change. Maybe Indians are as rich as Sri Lankans, it looks like. And If the economy were equal in size to the black economy, then India's per capita income would be $5200, almost on par with that of Egypt. (Of course, Egypt and Sri Lanka probably have under-reported their economies too, but not as badly as India).
Friday, December 26, 2008
Easy Economic Stimulus for India?
In India now. Not very impressed with Rs 52 per liter petrol when crude oil is trading at $40 a barrel.
A liter of petrol costs around Rs 52 in India right now. That translates to $4.06 a gallon. That's how much the US used to pay, back in July, when everyone was weeping about how unaffordable everything was. Right now, average cost of a gallon of gas is around $1.70 in the US. That is Rs 21 per liter (after taxes). When times were bad the US paid $4.10 per gallon, India paid $5.
Now, then, India is clearly a low income tax nation (i.e. there's very few rich blokes who pay their 33%). So, of course, the petrol tax must be a significant cash cow for the government. Reducing the petrol tax to zero, therefore, is not a tenable solution. And kicking it up to infinity also will kill tax revenues by asphyxiating demand. Clearly, there is a case for an optimum tax rate which shall yield maximum revenue to the government.
My expectation is that this "optimum" tax rate is probably not what is being levied right now. I believe that the petrol tax rate ought to go down - and that petrol ought to be available at a cheaper rate. Perhaps Rs 35 a liter or so. We're probably in the regime where lower tax rates equal larger revenues by stimulating demand.
Clearly, there shall be ecological repercussions. Indians consuming more shall emit more. And in a warming planet that would not be good news. But one must keep Shyam Sharan's words in mind while comparing Indian CO2 emissions with the emissions of the developed world. "Ours are survival emissions. Yours are lifestyle emissions". Worrying about Indians consuming a tad bid more when Americans (and the rest of the world) are hedonistically over-indulging is misplaced, stupid altruism. The bottom line is, India must consume more, emit more to raise its billion from poverty. Any reduction in emission must come from the developed world. Not India.
So, here's my suggestion to MMS and Chidambaram (and whoever else it may concern).
Cut fuel taxes. People will buy more cars. (Roads will get more congested - but that will result in greater and quicker infrastructure development and public transport use). More cars mean more demand. More manufacturing. More jobs. This will act like a stimulus which shall not be financed by a deficit. A win-win situation for all. (Even the environment as the resulting increase in demand shall increase fuel prices around the world a bit) - therefore increasing petrol prices in regions that use it inefficiently (the US basically).
Europe has a good incentive to keep prices low. They're plenty rich anyway and they need to curb their per-capita emissions. India can afford to keep it cheap. We're desparately, miserably poor. We need to emit more to develop more. Cut fuel prices now!
A liter of petrol costs around Rs 52 in India right now. That translates to $4.06 a gallon. That's how much the US used to pay, back in July, when everyone was weeping about how unaffordable everything was. Right now, average cost of a gallon of gas is around $1.70 in the US. That is Rs 21 per liter (after taxes). When times were bad the US paid $4.10 per gallon, India paid $5.
Now, then, India is clearly a low income tax nation (i.e. there's very few rich blokes who pay their 33%). So, of course, the petrol tax must be a significant cash cow for the government. Reducing the petrol tax to zero, therefore, is not a tenable solution. And kicking it up to infinity also will kill tax revenues by asphyxiating demand. Clearly, there is a case for an optimum tax rate which shall yield maximum revenue to the government.
My expectation is that this "optimum" tax rate is probably not what is being levied right now. I believe that the petrol tax rate ought to go down - and that petrol ought to be available at a cheaper rate. Perhaps Rs 35 a liter or so. We're probably in the regime where lower tax rates equal larger revenues by stimulating demand.
Clearly, there shall be ecological repercussions. Indians consuming more shall emit more. And in a warming planet that would not be good news. But one must keep Shyam Sharan's words in mind while comparing Indian CO2 emissions with the emissions of the developed world. "Ours are survival emissions. Yours are lifestyle emissions". Worrying about Indians consuming a tad bid more when Americans (and the rest of the world) are hedonistically over-indulging is misplaced, stupid altruism. The bottom line is, India must consume more, emit more to raise its billion from poverty. Any reduction in emission must come from the developed world. Not India.
So, here's my suggestion to MMS and Chidambaram (and whoever else it may concern).
Cut fuel taxes. People will buy more cars. (Roads will get more congested - but that will result in greater and quicker infrastructure development and public transport use). More cars mean more demand. More manufacturing. More jobs. This will act like a stimulus which shall not be financed by a deficit. A win-win situation for all. (Even the environment as the resulting increase in demand shall increase fuel prices around the world a bit) - therefore increasing petrol prices in regions that use it inefficiently (the US basically).
Europe has a good incentive to keep prices low. They're plenty rich anyway and they need to curb their per-capita emissions. India can afford to keep it cheap. We're desparately, miserably poor. We need to emit more to develop more. Cut fuel prices now!
Saturday, November 15, 2008
Traffic Monitoring
I have always suspected that at least a million people frequent my blog every week - and that they are too nice to leave comments. So, in order to track them, I have installed a traffic monitor widget (which you shall find if you scroll down). This will help me show off my huge traffic. Maybe I can install some google ad thingy and become a millionaire overnight.
In other news (not that this is a news site), they're sending traffic policemen to the moon to regulate all the cars that are probably being driven there.
In other news (not that this is a news site), they're sending traffic policemen to the moon to regulate all the cars that are probably being driven there.
Tuesday, October 21, 2008
My two cents on Economic Stimulus plans
I'm no Economist - and perhaps that isn't such a bad thing - if all economists do is dream up stupidities like the economic stimulus plan. (I allude to the $600 check that Bush and company sent every resident earlier this year and are threatening to do something similar again this year).
Because, as an engineer (and mind you, not an economist), I see that what got the whole world into this mess was, basically, Americans spending more than they could earn. (This is pretty much an American Mantra - just look at the US' fiscal deficit - which is more than India's GDP).
So, basically, America does not produce as much as it consumes. If America were a family, here's what an analogous scenario would look like:
Dad and Mum earn enough money to pay for groceries, but not enough to bankroll trips to the mall every week. But the daughters love going to the mall and buying their high fashion dresses; the sons like going to the sports shops and purchasing rifles to go hunting every week. The family likes to go on long vacation getaways and cruises to Bermuda in winter and Alaska in summer.
If they were living on a fixed income, this would never do. But what they do do is take loans, sink themselves deeper in debt. They were considering taking loans ad-infinitum to bankroll the said excesses.
If you are a family, you run into one problem: your credit history is well known. You just can't keep taking loans ad-nauseam. The lenders will know when to stop giving you money - because the lenders will lend only if there is reasonable a probability of getting the money back. The Mum and Dad are in for a rude shock one day.
But if you're the world's pre-eminent super power, things are a little different. You can keep borrowing money until ... well, until, probably, you're no more a super-power - but that's going to take a lot more time.
America is currently cutting taxes, spending like crazy on a war it it had no business starting (killing more than a million innocents (this tally includes 5000 odd coalition troops) - but let's not get started on that now). The American government is also bailing out companies such as AIG, Goldman Sachs and Freddie Mac (companies which contribute nothing directly to society) - swallowing all their sins, so to say.
On top of all that, America wants to send some more money to its citizens to spend. Given that the problem was essentially created by hedonistic overindulgence, the American government wants to rescue people from this mess by more hedonistic overindulgence. After all, alcholism has only one cure: alcohol. Or that's what Bernanke thinks.
To me, currently, the whole west is grossly unsustainable - both from an economic perspective and even more so from an environmental perspective.
What keeps me optimistic is that the current western model is so hopelessly inefficient that there's almost (almost) infinite room for improvement if prices of certain inputs go up. Suppose real "gas" prices go up from and stay at $5/gallon in the US - then the economy can adapt by becoming a little more efficient - increasing the number of hybrids, for instance and using more rail road transit. With little or no sacrifice on the standard of living front, Americans can live more "efficiently". I am sure they can do without all the useless junk mail in the mailbox, excesses as times square.....
Because, as an engineer (and mind you, not an economist), I see that what got the whole world into this mess was, basically, Americans spending more than they could earn. (This is pretty much an American Mantra - just look at the US' fiscal deficit - which is more than India's GDP).
So, basically, America does not produce as much as it consumes. If America were a family, here's what an analogous scenario would look like:
Dad and Mum earn enough money to pay for groceries, but not enough to bankroll trips to the mall every week. But the daughters love going to the mall and buying their high fashion dresses; the sons like going to the sports shops and purchasing rifles to go hunting every week. The family likes to go on long vacation getaways and cruises to Bermuda in winter and Alaska in summer.
If they were living on a fixed income, this would never do. But what they do do is take loans, sink themselves deeper in debt. They were considering taking loans ad-infinitum to bankroll the said excesses.
If you are a family, you run into one problem: your credit history is well known. You just can't keep taking loans ad-nauseam. The lenders will know when to stop giving you money - because the lenders will lend only if there is reasonable a probability of getting the money back. The Mum and Dad are in for a rude shock one day.
But if you're the world's pre-eminent super power, things are a little different. You can keep borrowing money until ... well, until, probably, you're no more a super-power - but that's going to take a lot more time.
America is currently cutting taxes, spending like crazy on a war it it had no business starting (killing more than a million innocents (this tally includes 5000 odd coalition troops) - but let's not get started on that now). The American government is also bailing out companies such as AIG, Goldman Sachs and Freddie Mac (companies which contribute nothing directly to society) - swallowing all their sins, so to say.
On top of all that, America wants to send some more money to its citizens to spend. Given that the problem was essentially created by hedonistic overindulgence, the American government wants to rescue people from this mess by more hedonistic overindulgence. After all, alcholism has only one cure: alcohol. Or that's what Bernanke thinks.
To me, currently, the whole west is grossly unsustainable - both from an economic perspective and even more so from an environmental perspective.
What keeps me optimistic is that the current western model is so hopelessly inefficient that there's almost (almost) infinite room for improvement if prices of certain inputs go up. Suppose real "gas" prices go up from and stay at $5/gallon in the US - then the economy can adapt by becoming a little more efficient - increasing the number of hybrids, for instance and using more rail road transit. With little or no sacrifice on the standard of living front, Americans can live more "efficiently". I am sure they can do without all the useless junk mail in the mailbox, excesses as times square.....
Friday, August 22, 2008
To Hell With Endangered Species
Ecosystems on this planet are in an eternal state of flux. Life adapts to its environment in a perpetual sequence of birth and extinction. While few species become dominant and successful - thriving on the available resources, many go extinct, unable to cope up with competition for the eternally scarce resources.
The human race, of late, has found the planet quite welcoming. You can find a human being almost everywhere. From the parched deserts of Saudi Arabia to the frigid infinities of Siberia; from the torrid heat of Sub-saharan Africa to the fertile plains of the Ganga; from the lowlands of death valley (I'm sure there's a guy living there) to the hills of Switzerland.
Just like cancer spreads around the body, the human race has spread around the planet. The human race is a miracle of evolution (so miraculous that most humans themselves, unable to believe it themselves, believe in a "god" to fill up the blank). I feel reasonably sure in contending that it is probably the only race in this history of planet earth which figured out how life came about - or at least made an effort in that direction. (Almost all cultures have made efforts in that direction - even the tribals have dieties that they worship. No culture pulls a blank when they are asked "How did the world come about?".)
The human race has placed a great strain on earth's the eco-system. Modern humans do not compete with other species for resources. Humanity usurps resources at will, driving all competition to extinction. Humanity is to its colleagues in the eco-system what Vito Corleone is to the New York city mobsters. (Only, humanity is not out to exact revenge.)
I am a firm believer in Darwinism. If I were alone in pristine wilderness and I saw an animal wounded, I would not stop and save it. I would let it die (it will feed other littler creatures that count of these sorts of windfalls for their very existence). So, I am more than happy to see the unfit perish.
Animals that are being driven to extinction are being driven to extinction because they are weak. Let them die. Why should we save them?
Additionally, what is the point of saving the tiger in India? Its numbers have dwindled so drastically, that it is as good as inexistent in the larger picture. Its impact on the overall eco-system is exactly zero. I say, to hell with the tiger. Don't waste money trying to conserve it.
They're going to die as soon as we stop pouring money into them. Because they roamed a huge area before. A few square kilometers in a national park are never going to do them any justice.
Spend that money on other environmental causes. Like increasing the number and size of national parks.
The same applies to the california condor (there's about 50 of them left). Because as soon as the efforts stop, the condors will begin their descent into extinction all over again. They just have no habitat left.
The human race likes to get the impression that it is having the cake and eating it too. Just like people get a warm fuzzy feeling when they witness their philanthrophy feeding an underpreviliged third world kid, they get the same feeling when they see their donations rescue a tiger from "extinction".
And to me, there is something fundamentally unethical and hypocritical about eating meat (when there are extremely healthy and tasty vegetarian alternatives) and then making attempts to save endangered species.
The only sustainable way out is to just forget about the tigers and the condors. To hell with endangered species.
The human race, of late, has found the planet quite welcoming. You can find a human being almost everywhere. From the parched deserts of Saudi Arabia to the frigid infinities of Siberia; from the torrid heat of Sub-saharan Africa to the fertile plains of the Ganga; from the lowlands of death valley (I'm sure there's a guy living there) to the hills of Switzerland.
Just like cancer spreads around the body, the human race has spread around the planet. The human race is a miracle of evolution (so miraculous that most humans themselves, unable to believe it themselves, believe in a "god" to fill up the blank). I feel reasonably sure in contending that it is probably the only race in this history of planet earth which figured out how life came about - or at least made an effort in that direction. (Almost all cultures have made efforts in that direction - even the tribals have dieties that they worship. No culture pulls a blank when they are asked "How did the world come about?".)
The human race has placed a great strain on earth's the eco-system. Modern humans do not compete with other species for resources. Humanity usurps resources at will, driving all competition to extinction. Humanity is to its colleagues in the eco-system what Vito Corleone is to the New York city mobsters. (Only, humanity is not out to exact revenge.)
I am a firm believer in Darwinism. If I were alone in pristine wilderness and I saw an animal wounded, I would not stop and save it. I would let it die (it will feed other littler creatures that count of these sorts of windfalls for their very existence). So, I am more than happy to see the unfit perish.
Animals that are being driven to extinction are being driven to extinction because they are weak. Let them die. Why should we save them?
Additionally, what is the point of saving the tiger in India? Its numbers have dwindled so drastically, that it is as good as inexistent in the larger picture. Its impact on the overall eco-system is exactly zero. I say, to hell with the tiger. Don't waste money trying to conserve it.
They're going to die as soon as we stop pouring money into them. Because they roamed a huge area before. A few square kilometers in a national park are never going to do them any justice.
Spend that money on other environmental causes. Like increasing the number and size of national parks.
The same applies to the california condor (there's about 50 of them left). Because as soon as the efforts stop, the condors will begin their descent into extinction all over again. They just have no habitat left.
The human race likes to get the impression that it is having the cake and eating it too. Just like people get a warm fuzzy feeling when they witness their philanthrophy feeding an underpreviliged third world kid, they get the same feeling when they see their donations rescue a tiger from "extinction".
And to me, there is something fundamentally unethical and hypocritical about eating meat (when there are extremely healthy and tasty vegetarian alternatives) and then making attempts to save endangered species.
The only sustainable way out is to just forget about the tigers and the condors. To hell with endangered species.
Wednesday, July 23, 2008
77% of India below Rs 20 a day?
Mr. Budhadeb Acharya, a Marxist made this proclamation on the floor of the parliament. Frankly, this analysis scared me. I am quite comfortable with my "feel" of macroeconomic indicators of nations that "matter" (to me). This Rs 20 a day statement confounded me.
And here's why. India's nominal per-capita income is Rs 40,000 per year (and this is the average of multiple sources). This becomes Rs 110 per day, a far cry from Rs. 20 per day. So, if 80% of the country lives (as alleged) on Rs 20 per day, then the other 20% (220 million) must be living very, very prosperously.
So, I went ahead with some fact-checking.
Turns out, Mr. Acharya was quoting a very, very confused study. The sudy in question was conducted by National Commission for Enterprises in Unorganized Sector (NCEUS). This article from the Indian arm of Rupert Murdoch's WSJ put things in perspective. The study "accounted" for purchasing power parity. The reality is that 80% of India lives on less than $2 a day - or Rs 80 a day. (The corresponding income is 2400 per month - or Rs 10k per month for a familty of four).
The geniuses behind the study recognized that Each American dollar becomes Rs 10 in "purchasing power" - and went ahead and proclaimed that 80% of India earns Rs 20 a day. This statistic is true only if an Indian works in India, earns his Rs 80, somehow spontaneously materializes in the US, converts his Rs 80 to $2, goes grocery shopping in the US, dematerializes from the US and re-materializes in India to work again.
The study ought have said "80% of India earns $8 a day".
What disconcerts me is that there are absolutely no editorials, no comments about this blunder which was uttered in the parliament. For isntance, The Hindu carried his comments as if this were some factoid.
I think Mr. Acharya got carried away when he was trying to quote some "statistics" to butress his cause. I don't blame him - any statistic is a good statistic if you're trying to make a point.
This sadly proves to me that the best minds in India certainly don't go into mass media.
And here's why. India's nominal per-capita income is Rs 40,000 per year (and this is the average of multiple sources). This becomes Rs 110 per day, a far cry from Rs. 20 per day. So, if 80% of the country lives (as alleged) on Rs 20 per day, then the other 20% (220 million) must be living very, very prosperously.
So, I went ahead with some fact-checking.
Turns out, Mr. Acharya was quoting a very, very confused study. The sudy in question was conducted by National Commission for Enterprises in Unorganized Sector (NCEUS). This article from the Indian arm of Rupert Murdoch's WSJ put things in perspective. The study "accounted" for purchasing power parity. The reality is that 80% of India lives on less than $2 a day - or Rs 80 a day. (The corresponding income is 2400 per month - or Rs 10k per month for a familty of four).
The geniuses behind the study recognized that Each American dollar becomes Rs 10 in "purchasing power" - and went ahead and proclaimed that 80% of India earns Rs 20 a day. This statistic is true only if an Indian works in India, earns his Rs 80, somehow spontaneously materializes in the US, converts his Rs 80 to $2, goes grocery shopping in the US, dematerializes from the US and re-materializes in India to work again.
The study ought have said "80% of India earns $8 a day".
What disconcerts me is that there are absolutely no editorials, no comments about this blunder which was uttered in the parliament. For isntance, The Hindu carried his comments as if this were some factoid.
I think Mr. Acharya got carried away when he was trying to quote some "statistics" to butress his cause. I don't blame him - any statistic is a good statistic if you're trying to make a point.
This sadly proves to me that the best minds in India certainly don't go into mass media.
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