Are Indians hardworking
New superpower: why India could soon catch up with China
Violence, chaos, poverty: India, the fifth largest economic area in the world, has an image problem in the “West”.
But what will soon be the most populous country of all time is much more successful and important than we think.
India expert Michael Braun Alexander has now published a book about the coming superpower. The author wrote a short version for Business Insider.
India has a terrible reputation in much of the world; the country's image is in a mess. With almost 1.4 billion people today, the South Asian nation is seen by many as a symbol of poverty, a moloch of crowds and slums, a haven of disease, violence, ominous caste system, religious fundamentalism and environmental pollution.
There is a core of truth in such clichés. However, they only cover a small section of the complex economic, political and social mix-ups on the subcontinent - and blind many peoplepositive Facets simply out. Because: Numerous indicators and current trends suggest that the Republic of India will play a key global role in the 21st century - not unlike the People's Republic of China, which has long been taken seriously as the new “superpower” and antagonist of the USA.
In a few years' time India will overtake China in terms of population
In a few years, India will number close to 1.5 billion people, according to UN estimates. It will overtake and overtake China in terms of population and not only become the largest nation on earth, but also becomegreatest people in human history. The current population growth in India is around 15 million a year, a good 40,000during the day. So every two weeks south of the Himalayas, to put it bluntly, a Bremen, Dresden or Hanover is added. The United Nations predicts that India will have a population of 1.65 to 1.7 billion by the middle of the 21st century. It would then be almost as populous as China and the United States combined.
India is already the fifth largest economy in the world on a dollar basis, behind China, the USA, Japan and Germany. In the case of purchasing power parity calculation, in which different price levels are taken into account and which is therefore more meaningful, it is currently in third place - farin front Germany. The economic growth rates on the subcontinent suggest that India will catch up with Japan and (around 2040) the USA within a few years. In the second half of the 21st century it could even take the top spotlargest economy in the world take in. Raghuram Rajan, for example, who is head of the Reserve Bank of India, India's central bank until 2016, thinks this is possible.
Around 300 million Indians speak English, the lingua franca of the global business world
Particularly in comparison with China, the most impressive economic success story of the past decades, the Republic of India has two decisive locational advantages. For one thing, the country has been a stable one since the declaration of independence in 1947democracy. The governments in the capital New Delhi and in the states and territories are anchored and legitimized in the electorate and society in a way that the communist regime in Beijing with its model of authoritarian state capitalism can only dream of. On the other hand, about 300 million Indians speakEnglish, The lingua franca of global business.
In addition to Germany and many other EU countries, China, Japan and even the USA have a demographic problem in comparison with India, the dimensions of which will steadily gain drama in the coming years and decades: the aging of society. Indian society, on the other hand, is extraordinarily young. TheMedian age is around26; Around 700 million Indians are therefore each older and younger than their mid-twenties.
No other country has so many listed companies
Many Indian corporations are already playing in the global top league. India has more publicly traded companies than any other country. According to the World Federation of Exchanges (WFE), a global association of exchanges, around5,000 public companies listed on the Bombay Stock Exchange (BSE) in Mumbai. According to WFE, the New York Stock Exchange (NYSE) has around 2,300 companies, the American technology exchange Nasdaq around 3,000, and the Deutsche Börse only a few hundred.
But Corporate India is not only characterized by quantity, but also by class in many industries. A conglomerate based in Mumbai is currently dominating the headlines:Reliance Industries (RIL). Originally an oil and chemical giant, RIL has been with the newly founded subsidiary since 2016Jio turned the Indian telecommunications market upside down and made it to the market leader in just three years with currently around 400 million smartphone and cell phone customers.
The Reliance Group with its boss and major shareholder Mukesh Ambani is also the largest retailer between Kashmir in the north and Kerala in the south - and thus a kind of proxy share for investors in the Indian economic area. Jio Platforms in particular is likely to have a bright future and could mutate into a kind of “Indian Alibaba” in the coming years. The US financial elite has just bought billions of euros from Jio Platforms. Facebook paid $ 5.7 billion for an approximately ten percent stake; Google announced last week that it would be contributing $ 4.5 billion. Several investment companies are involved, each with ten- or nine-digit dollar amounts.
The pharmaceutical companies Sun, Cipla and Glenmark are now considered to be the world's pharmacy
The list of Indian blue chips is long. TheTata-Gruppe, another conglomerate from Mumbai, is as broadly positioned as Reliance and provided years ago with takeovers of British companies such asJaguar Land Rover (byTata Motors) and Tetley tea (Tata Global Beverages, todayTata Consumer Products) caused a sensation. Tata is now the largest industrial company in Great Britain. The steel daughterTata Steel had planned a German-Indian joint venture with ThyssenKrupp two years ago, which collapsed due to antitrust concerns.
Leading banks likeHDFC Bank (private) orState Bank of India (with the state as anchor shareholder) are now among the top 100 in the world. Indian pharmaceutical companies likeSun, Cipla orGlenmark are in many ways what their German forerunners were in the 20th century: the world's pharmacy. About a billion of the prescriptions issued in the US in a year are now Indian-made drugs. India's pharmaceutical giants supply most of all emerging and developing countries with medicine.
Millions of IT experts work in the high-tech centers of Bangalore, Hyderabad and Pune
The most important, most sustainable industry of all, however, is likely to be India's IT sector. In order to understand its dimensions, a comparison with SAP is helpful, currently the most valuable DAX company, which employs around 100,000 specialists worldwide. India's IT corporations, on the other hand, although their names are largely unknown in Europe, are already in a different league in terms of numbers.Tata Consultancy Services (TCS) has a staff of more than 400,000;Infosys of a good 200,000;Wipro of more than 160,000. In addition comeHCL Technologies (120.000), Tech Mahindra (more than 100,000),Cognizant (a US company with nearly 200,000 employees in India),DXC Technology (a good 150,000) and many more. In total, India has several million IT experts, especially in the high-tech centers of Bangalore, Hyderabad and Pune - and of course in California's Silicon Valley, the technological pacemaker of our era.
Since 2014 under Prime Minister Narendra Modi, India has experienced a second wave, more extensiveEconomic reforms. (The Prime Minister of Congress P. V. Narasimha Rao, together with his Finance Minister Manmohan Singh, initiated an initial phase of liberalization in 1991.) The state is investing heavily in the federal and state levelInfrastructure - in roads, airports, waterways, local public transport. Millions of public toilets have been built in the past six years. New Delhi pushed the expansion of a statutory basic health insurance, especially for poorer social classes, as well as bank accounts for everyone within the framework of theJan–DhanProgram (for example: "Volkgsgeld").
Not every reform was successful. In 2016, for example, Modi's demonetization - a de facto cash ban overnight for 1.5 billion people - went completely wrong. Many other things, however, have improved India's legal and economic framework significantly in recent years, such as theSales tax reform and a new oneBankruptcy law.
Compared to India, the German working world is an amusement park
Finally theWork ethic in the country, which quite a few in the “West” think they know to be poor - for example in comparison with the well-known, hard-working, hard-working Germans. Since this is a sensitive topic, a very serious source should be cited here, namely Mohanda's “Mahatma” Gandhi, who wrote a good 100 years ago: “We [Indians] are accused of being a lazy people, whereas the Europeans are very hardworking and entrepreneurial. "(Hind Swaraj, 1909).
Such stupid clichés from outside observers are unencumbered by any expertise. In a study, the major Swiss bank UBS examined the average annual working time in 77 large cities worldwide (for 2018). Mumbai, India's economic capital on the west coast, came in first with 3,315 working hours, New Delhi (2,511 hours) in fourth place. World metropolises such as New York, Shanghai and Tokyo followed far behind. In major German cities, UBS again determined values between 1,770 and 1,830 hours per year. However, this estimate is possibly too high; the OECD assumed that the average working time of employees and self-employed in Germany in 2017 was only 1,356 hours. In short: Compared to India, the German working world is an amusement park. Indians work around twice as much as Germans - with generally much lower real incomes. So a case of “laziness” and a poor work ethic? Absolutely. But not from laziness in India.
The still young 21st century is often interpreted as an “Asian” century - which is usually intended to signal: the “Chinese” or “Pacific”. Without a doubt, the Chinese economic area is currently by far the most important in Asia and will remain so for the foreseeable future. However, it is not only the “Middle Kingdom” that has seen a tremendous economic upswing, but also - with a time lag of around twelve or 15 years - India, the largest democracy in world history. All of us in the “West” would do well to keep a close eye on China's career as well as India's. With many parameters, both billions of people - yes: also the allegedly so "poor", "sluggish", "backward", "dirty" India - will overtake Europe and overtake Europe.
Michael Braun Alexander is one of the most prominent financial journalists in Germany. He has been writing about the stock market and economics since 1995, including as a correspondent in Mumbai and New York and as a columnist for the Picture on sunday. India Superpower: Rise of an Economic Power, its twelfth book, has just been published by FinanzBook Verlag, Munich (400 pages, 22.99 euros hardcover, e-book 19.99 euros).
The The author points out that he is a shareholder in some of the companies mentioned in the text.
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